Bonuses for Failure

Everyone is upset about AIG. They are paying bonuses of $165M, some of which are going to the same executives responsible for the problems they are in. The argument is: why should they get paid extra for doing a bad job? A good question.

But the bonuses were pre-negotiated, so they are obligated to pay them (or owe double under Connecticut law). The government was no only aware of those bonuses when they handed out the bailout money, but they actually wrote a clause into the bailout that the bonuses could be paid. But now that people are mad, the government is outraged and "surprised" about those very bonuses.

Nobody likes to reward failure. Many people feel cheated because these bonuses are being paid because we kept the AIG afloat with $170B of bailout money. But wait, I thought I just said nobody likes to reward failure. So if it is wrong for AIG to reward failed employees with cash, why is it right for the government to reward AIG with cash -- over 1000 times more cash than the bonuses everyone is mad about.

As a rewarder of failure, no one can hold a candle to the government. Over the last six months, they have dumped trillions of dollars of our money into companies that screwed up. And now they want us to be angry over $165M. Methinks they dost protest too much.

So if you are angry over the AIG bonuses, at least be intellectually honest and be 1000 times angrier over the AIG bailout.