In all the noise about the AIG bonuses, the big news has been missed. Since September of last year, management at the firm has successfully unwound more than $1 trillion of credit market exposure. There are times when the avoidance of loss is as important as actual profits, and this is one of those times.
While politicians can dither and regulators zigging and zagging, there can be no argument that if that trillion dollars of contracts had gone south so would have our economy. I do not credit our regulatory system with saving the bacon; nor did the bailout do much of a positive nature. Instead, I'll take the radical and unpopular position that it was the team at AIG that prevented a financial China syndrome, a melting to the very core of the earth.
For their rescue, for saving the American market, for focusing on their jobs and safely disposing of more than 1,000 radioactive billion dollar deals those employees who stuck with the company were rewarded with their salaries and 300 of them split $170 million in bonuses. Those bonuses total less than .2%, that's two-tenths of one percent, of the what they saved.
For that, they've been pilloried as only those pimpish prima donnas who rule can do.
Those miserable failures sitting on congressional committees should take to heart the wisdom that
You don't need to be nice to people on the way up if you're never, ever, ever coming back down.As times change and politicians in Washington come to understand that we—and they—need the bankers on Wall Street and in Charlotte and San Francisco working for us, perhaps they'll show a little graciousness.