Thursday, March 26, 2009

Dear A.I.G., I Quit!

If you've turned on a TV or read a newspaper in the past 2 weeks, you've heard about the AIG corporate bonus/government mob scandal. I put that slash in there because the reason this is such a big deal in my mind is not because businesspeople in finance received bonuses, but because of the federal government's response to the AIG paying its employees what was in there contracts (shocking indeed!). A lot of this comes down to what was specifically in the contract in my mind. If the contract said that people would get a sizable check at the end of the year so long as they were not fired, then they are owed that by contract. It's not even a bonus at that point because they're not being rewarded for performance, but rather, it's just a larger paycheck they get one week than they did another according to the terms of employment. For politicians to think that they can undo these contracts at their whim and merely within days of when the bonuses are to be paid because they don't like this specific group is an abuse of power and one of the greatest antitheses of rule of law that I can imagine. This should be no shock to anyone, though, because once the government starts to gain control over corporations and eliminate private industry, the tyranny will surely come out with little wait.

Yesterday, the New York Times published a letter from one AIG executive who resigned in disgust with AIG's handling of the situation. It's a doozy and if you haven't read it yet, I highly encourage you to check it out. Here are some fun excerpts:

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

It’s now apparent that you [one of the leaders at AIG] either misunderstood the agreements that you had made — tacit or otherwise — with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.

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