It is the favorite excuse of losers -- no one could have seen it coming. Condoleezza Rice said it about 9/11 after she had been handed a memo saying, "Bin Laden Determined to Strike Inside the United States." George Bush said it about the levees breaking during Hurricane Katrina after he had sat through a presentation on how the levees would break during Hurricane Katrina. CNBC said it about the crash of the market and economy as they bragged day in and day out about how well they knew the market.
And now the Obama administration is saying it about the AIG bonuses, as they damn well knew it was going to happen. In fact, they pushed for it to happen. Several times, Tim Geithner argued that companies receiving bailouts should be allowed to give most of their executives any damn bonus they like. And he won that argument.
Every time a bill came up to limit executive bonuses they watered it down. They said the companies couldn't retain top "talent" without it. They said they were afraid of a "brain drain." And the list of dumb excuses goes on and on.
So, they were wrong. I can abide by that. What I cannot abide is the fake shock and outrage. The claim that no one could have seen this coming. I saw it coming! Read what I wrote here and here and here. How clear was it to me -- and anyone paying attention -- that they were going to give away our money to executives who did not deserve it? Crystal clear.
Time after time, the Bush administration, the Obama administration and Congress had an opportunity to attach limits on executive pay to legislation authorizing bailout money. And time after time, they refused. So, please spare me the bullshit outrage. If you didn't see this coming, then you are an absolute moron.
It turns out if you let people take millions of dollars in money they didn't deserve, they'll take it every time. Of course!! I'd probably do it, too. The bellyaching about greed is unbearable. If you set up a system, where people give themselves compensation with no accountability to the people putting the money in, they will obviously give themselves as much compensation as they can possibly get away with. Every time.
To not understand that is to not understand human nature. It was the government's job -- as the primary lenders and financiers of these essentially bankrupt companies -- to dictate the rules of the game. Of course, they could have put strings on that money. They could have capped bonuses, or salaries overall. They could have capped it for everybody, instead of just the top five or twenty-five executives. They could have taken these companies into bankruptcy, where the executives would not be legally entitled to their salaries or bonuses.
Yet, they did none of these things. Instead, AIG executives will walk away with $450 million in bonuses -- at a company that was such a colossal failure that it lost $99.3 billion last year and required a $170 billion taxpayer bailout. Worse yet, the executives in the division that caused this epic meltdown will get $165 million in bonuses. I can't get over the injustice of that.
But don't worry, we are told that Tim Geithner "was really upset by the news" and "berated them" over the phone. What a joke! Wow, that tongue-lashing must have really stung. I wonder if their several million dollar bonus will help cushion the blow of being yelled at. Geithner is responsible for setting the rules in the first place. It's all in the rules. If you let people take the money, they will. If you don't allow it as a condition for receiving the money, they can't. As the politicians scurry to find someone to blame, they should look in the mirror. They're the ones that set the rules of this game.
Now the same politicians who brought you this piece of injustice will claim a) there is nothing that can be done and b) will pretend to be outraged and then not fix the underlying problem. The politicians will huff and puff and probably do nothing. So, after all this fake outrage, will this happen again? If this broken incentive system is not fixed, of course it will. You can bet your bottom dollar on it. In fact, you already have.