AIG and the Rest of the Looters

There's a cartoon in my mind. (That's the best place for it; I can't draw. I never could.)

In this cartoon in my mind, these guys are running out of a bank -- ski masks over their faces, huge bags of money slung over their shoulders -- only to find a swarm of policemen waiting for them on the sidewalk with guns drawn.

They're completely surrounded. The jig is up. And one of the robbers looks at the cops and he says, "What if we give back half of it?"

Nice try.

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Welcome to AIG-Land, where no bad deed goes unrewarded -- and the worse the deed, the bigger the reward. If the high fliers of high finance haven't made enough millions on the front end, crafting their too-good-to-be-true, too-complicated-to-understand schemes, there's always the back end, where more millions await the miscreants who are willing to hang around the scene of the crime a while longer and untangle a few of the knots.

Make a mess -- get paid huge bucks for it.

Clean up the mess -- get paid huge bucks for it.

Quite a system they've got there. Where do the rest of us sign up?

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A Thought for the Day: Any financial instrument that is so complex that it can only be understood by those who concocted it is, by definition, out of control.

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Is there anything in all the world quite as bracing as an eruption of congressional rage?You can see the steam spewing from congressional ears, the sound bites tripping from congressional tongues. It's inspiring, really -- all that passion unleashed on behalf of the American taxpayers, who, truth be told, are not in a particularly pleasant mood themselves at the moment.

There's a connection there. The congressmen and congresswomen find themselves with only two choices in the current circumstance. They can demonstrate that they are every bit as angry as the American taxpayers are. Or they can become the target of that anger.

Since they'd like to hang on to their jobs for a while yet, it's not an especially difficult choice.

Cue the bluster.

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There's a fantasy in my mind: What if the bonuses worked the other way?

What if, instead of the high fliers and the rule benders raking in all the cash, some of it went to the ones who figured out how to stop them?

Right now, the high-finance boys get the big salaries, and the even-bigger bonuses. The regulators, by comparison, get paid a pittance. The result? The top firms get their pick of the top talent -- the sharpest minds, the most creative number masseuses -- while the agencies that are supposed to keep tabs on them struggle to keep up. Even the best of the regulators often get lured away within a few years; they have families to support, after all, and house payments to make.

But what if it worked the other way?

What if the regulators were better rewarded for their efforts? Much better rewarded? What if they could keep some hefty percentage of the proceeds of every scam they uncovered, every scheme they shut down? Suddenly, the "upside potential" starts looking pretty sweet. (Impressed by the way I can sling the lingo?) Suddenly, the agencies are the place to be for the math wiz with a bit of the bounty hunter in him.

Suddenly, we've got ourselves a fair fight.

Next thing you know, they'll start paying teachers top dollar, too, and nurses, and social workers. Entice more of that top talent out of finance altogether, and into fields that could really use it.

I can't draw, but I can dream.

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Rick Horowitz is a syndicated columnist. You can write to him at rickhoro@execpc.com.