There has been much controversy over the past few weeks about the AIG bonuses. If I didn't know any better I would have thought that solving the bonus "fiasco" is somehow more important than tackling our troubled economy. I mean seriously is it productive for our politicians to spend time pinpointing who is at fault for $160M in bonuses delivered to a bailed out company, or should they inquire why the company required billions upon billions of dollars of bailout money?
It's like giving a homeless person a $100 to get some food and then getting pissed off when he buys chewing gum for a quarter. It just doesn't make sense (Afterall giving money to the homeless is silly, since it discourages them from working and they are going to spend the money on drugs anyway). Not to mention the fact that everyone is way too quick to finger point at the big bad corporate execs receiving their undeserved bonuses.
First off, unless someone does a study of each bonus recipient and performs their performance evaluation, they don't know if a specific individual is responsible for AIG downturn. No one can make blanket statements that all AIG executives were active in bringing down the insurance giant.
Secondly, companies use bonuses as a form of compensation in order to attract the top talent. If the government wants a failing company to become even more incompetent, it should just start regulating compensation and hiring policies. It's a well known fact that nothing attracts top talent more than the government oversight, regulation and low levels of compensation, just look at our federal government employees.
Thirdly, the bonuses were part of the employment contract of these individuals, and taking away their compensation isn't exactly just. Top executives routinely receive most of their compensation through bonuses, so taking away their bonuses is taking away the compensation that AIG employees depend on.
But if the government really wants to get its $160M back, I have a solution. I propose that members of Congress start looking within themselves for cost saving measures. Some members of Congress, such as Nancy Pelosi, who is a multimillionaire and the wealthiest member of Congress still receive six digit gov't paychecks and benefits. If we take away all forms of compensation and benefits from nationally elected officials I'm sure we can save around $160M. Our Congressmen, Senators, and Presidents should not be motivated by compensation to run for office, and my guess is very few of them are. They are more likely to be tempted by "other" forms of compensation that they receive while in office, which eclipse their meager federal salary and benefits. I also think that stripping Members of Congress of compensation, would follow the same logic used to strip AIG executives of their bonuses. AIG executives failed AIG, and our Congress failed the American people, so why should our Congress deserve compensation?
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