Misplaced Economic Outrage

Mar 17, 09 Misplaced Economic Outrage
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Boo hoo!  AIG paid their top executives $160 million of our hard earned tax dollars and we are supposed to be up in arms about it.  Maybe you are genuinely pissed about this issue; and maybe it’s a way to rile up the Joes to get a free drink at the local pub.

Either way, I am quite bored by the grandstanding from politicians and average Joes alike.  Of course the executives took their bonuses and yes, they should keep them.

When these individuals created the financial instruments that led to our doom, politicians and regulators were asleep at the wheel and “hard-working” tax payers were flush with credit and spending themselves into debt.  Now, when the toothpaste is out of the tube, everybody wants to catch feelings.

Besides some trite sense of justice, and satisfying a uniquely American sense of vengeance, what will making these executives forgo their bonuses accomplish?  The bonuses amount to less than 1% of the total bailout money we have already given to AIG.

Wanting to punish these executives is the equivalent of wanting to kill the Frankenstein monster when Dr. Frankenstein is the one who got us into this mess with his unholy experiments.  Who are the Dr. Frankensteins of this crisis?  I am glad you asked.

Besides Tim Geithner, who I have discussed before, Obama’s other top economic adviser is Lawrence Summers.  Larry Summers was the genius that pushed for deregulation of the credit derivatives markets, which is the underlying cause behind our economic collapse in general and the need to bailout AIG in particular.

This excellent article in The Nation details the economic devastation Summers has left in his wake.  Besides Geithner and Summers, Mr. Obama’s economic team is full of Wall Street and banking insiders and lobbyists.

Many people turned to Mr. Obama because they believed that he was genuine about fixing what is wrong with America.  In my private conversations, I have always asserted that he was more of a consensus builder than a revolutionary.

He is the embodiment of the Blackberry model of new American business.  He hired old hands to run the economy and threw in some tech savvy window dressing.  So, be mad at the AIG executives, and Wall Street analysts, and all the other financiers that have been gaming the system.

But mostly, be mad at yourself.  In our desperation to get out of the desert, instead of electing Moses, we elected the guy that created the golden calf.  Hey, at least it was a helluva party…

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