AIG Outrage

I am part of the populist outrage over the bonuses paid to the AIG people and I think I have figured out why we can't get a handle on the financial problems facing our country. Our government is suffering from the effects of 200 years of inbreeding our political leaders. Most of us here in the South know that you can't continue to inbreed any line of stock and not have troubles. What we've done in Washington is to inbreed our political leaders for so long that no one in government today knows how to work with companies that are broke. All of our leaders both in the Executive Branch and Congress are rich and have been for generations. Now Obama may be different, being black and poor in Kansas probably taught him a little about working from behind, though he's never had to tell a group of employees they no longer had a job, or explain to a bank they are not going to be repaid on a loan. You see good people who go broke know something about the real way things work in hard times. For example, take the AIG thing everyone is mad about now, the bonuses. A person whose has ridden a losing company down would be much better suited to deal with AIG's problems than Timothy Geithner, former Chairman of the New York Federal Reserve. A man with experience in broke companies would have known how to deal with all those contracts AIG wrote, insuring the trillions of dollars of mortgage back securities. The first thing he would have done would be to call the insured customers in and tell them how AIG's lawyers were putting the finishing touches on a bankruptcy petition in the next room and if they wanted anything they had better take the $.30 on the $1.00 you were fortunate enough to be offering right now or they would not get anything. Bill Glasscock and old trailer man would have settled everything AIG owed around the world for little more that $.50 on the dollar. Not the government, they are paying everybody 100%, regardless of what they knew they were asking AIG to insure.

The next thing would have been to call a staff meeting in every office the company had and use one of those new teleconferencing machines to put on a dog and pony show for all those rich employees waiting to be paid the $170,000,000.00 bonuses. On stage with the AIG officers and directors you would have the Senior Partner of the biggest bankruptcy law firm in the world. The CEO would have introduced him to all the employees, had him explain how he needed to get this done quickly since the Bankruptcy Court Clerk closed at 5:00 p.m. and he needed to get there soon if the employees did not agree to forgo their bonuses this year. He would assure everyone gathered they should agree to forgo the bonus this year in order for them to avoid the long arm of the Trustee in Bankruptcy taking the money they had already received from last year. He would promise them a note from the company for this years money to be paid at such time as the company had sufficient cash in retained earnings to pay the amount they were supposed to get this year without any additional interest. The employees would have started a stampede to sign up for the deferred money just to have the peace of mine that comes from keeping the money from last year they had already spent.

Our problem is people who have never been broke don't think like everyday people. These people charged with getting us out of this mess think they have got to make everybody 100% whole. The government does need to pay 100% of everything it owes, that is key to our continued position in a global economy. AIG and the other private companies are different. The people they owe are due to take a haircut just like the poor Joe's out of work because of the recession. AIG doesn't have the money. Why are AIG's creditors any more entitled to full payment than Sam's Hardware creditors that lost money when Sam's went belly up in the heartland? Bring Lee Iacocca out of retirement, Bill Glasscock is dead.

Give me a smart bankruptcy trustee like Phil Geddes and I could save the government enough to pay for at least one more war and give everybody a mule and forty acres