Joining the Chorus

As news has been breaking of the massive bonuses paid to employees in AIG's financial products division, the outrage has been swift and united. For those that don't know this is the division with their brilliant derivative plans that designed "products" (read: paper) that pretty much sank AIG and helped to bring about the sinking of the world-wide economy.

Yeah, it wasn't just AIG, but they and companies like them played a HUGE part in all this.

The employees in question are recieving large bonuses because 1) the only took $1 in salary this year and 2) in 2008 their contracts were changed to insure they recieved bonuses equal to 2007s. (Hmm, interesting, in 2008, things were already looking bad, why insure bonuses be paid equalling those from a "good," if false, year?)

Now, I'm sure these people make lots of money in their normal salary, in the sake of saving money, why were bonuses not scrapped and department pay capped at 100k? Sure, 100k seems like a lot, but compared to a bonus of 1million? Its nothing!

These people, though they made many stupid decisions are highly educated and 100k isn't really an unfair wage. Also, if they don't like it, in the current market, its not like they can quit easily and go make more money elsewhere.

Reading one person's comments saying "...I'd like to see government workers figure out this mess" is a bit misleading. Part of the problem is the people who designed these things don't 100% understand them. I have heard a number of people with doctorates in finance, math, and economics all saying about derivatives is that is amazingly complex math fused with complex legal documents. Nobody completely understands or knows what's going on with them.

Well, maybe that one guy, but he's on vacation.......

This entire financial crisis, well, its been evident to me for years before this, but this has driven it home. We are not a capitalistic society. Oh, sure, we use the tenets of capitalism, but its a cronyistic system now. Whether it is in business by companies CEO's being on boards of other companies and voting for insane compensation packages, or in government by, well, we all know how that works, merit has nothing to do with it far too often. Its who you know and what you can offer them.

Don't think I only believe it was the fat cats who caused this mess. WAY too many regular people did moronic things with their money. However, if big money investors had not bought the loans, well, the market wouldn't have existed.

As long as the system of rewarding those on top regardless of performance continues, well, things are not really going to get much better.