I am as disgusted and angry as any American over the AIG bonuses given to a bunch of executives whose performance has been so catastrophically bad that in a just and moral society, they would have been in the stocks rather than laughing all the way to the bank with what amounts to our money. (Actually, it’s our children’s money, but who’s counting?)
It really is too bad we no longer put violators of the moral order in stocks. The Puritans certainly had the right idea, according to Wikpedia:
Public stocks were typically positioned in the most public place available, as public humiliation was a critical aspect of such punishment. Typically, a person condemned to the stocks was subjected to a variety of abuses, ranging from having refuse thrown at them, paddling, and tickling, to whipping of the unprotected feet - bastinado.
I’m sure you can see the efficacy of putting all of these bank big shots in the stocks. That way, we can all have a crack at them. We might even consider taking the show on the road, as it were, and go from city to city, town to town, with executives from AIG, Morgan Stanley, Citigroup, Bank of America, and all the other bail out blue noses whose stupidity and utter disregard of good business practices (limiting risk) got us in this mess. Imagine some of the AIG execs in Central Park with people lined up to throw rotten fruit at them, jeer them, scream at them, perhaps even tickle their feet. Or a few Bank of America execs with their head and feet locked in the stocks set upon the Commons in Boston.
How cathartic would that be? We really wouldn’t hurt them - too much. Mostly, they would be royally humiliated and we, the people, would have the satisfaction of taking out our frustrations and anger on some of the perpetrators of this economic mess we find ourselves in.
But really, why stop at the bank execs? Why focus our anger solely at these rich, mostly white, mostly male goofs? Personally, I’d like to see a few others as fodder for some rotten tomato throwing. We might want to include some Treasury Department bureaucrats who apparently think that not knowing where $300 billion in TARP money has been spent is anything to get very excited about.
NRO’s David Freddoso recounts a hearing last week that featured Neel Kashkari, interim assistant treasury secretary for financial stability, who more or less shrugged his shoulders and said “I dunno” when angry, confused congressmen asked him some very uncomfortable questions about how the TARP money was being spent:
Rep. Jim Jordan (R., Ohio), the conservative ranking member of the subcommittee, noted that the Treasury had sold Congress and the American people on the $700 billion TARP bill last year by insisting that it was absolutely necessary to purchase toxic mortgage-based assets from key institutions.
But with $300 billion of TARP out the door already, Jordan asked, “Am I correct in saying that not one mortgage-backed security has been purchased?”
“Yes, sir,” said Kashkari. The program for purchasing MBSs, he explained, is still being developed. Treasury has so far spent $300 billion to treat the symptoms of the problem and prevent a complete collapse.
In their questioning, some members revealed an ignorance of the subject matter, but in many cases they still had a point. One by one, they called for increased government micromanagement of TARP-aided businesses. Reps. Dennis Kucinich (D., Ohio) and Dan Burton (R., Ind.) joined in outrage over the fact that Citigroup was sill doing overseas business, despite the bailout. “How does [an $8] billion dollar financing deal to Dubai ease the liquidity crisis in the U.S.A.?” Kucinich asked, referring to one of the loans Citi has made since taking $45 billion in government funds.
Must — or should — Citi stop conducting international business as a condition of its bailout? It seems unreasonable, especially if the foreign business is an integral part of the company’s normal operations. But if the TARP money is supposed to be aiding domestic liquidity, Kucinich and Burton still have a point. Should Citi and Bank of America (which provided $7 billion in financing for the China Construction Bank Company) and JPMorgan (which invested $1 billion in an Indian venture) be taking billions from TARP, then making new loans abroad?
It’s a good question and Kashkari gave the standard, free market response:
“With investments in almost 500 institutions, and hundreds more in the pipeline, we must ensure that our investments are targeted at stabilizing the economy, but we must also take great care not to try to micromanage recipient institutions. However well-intended, government officials are not positioned to make better commercial decisions than lenders in our communities.”
The problem, as Freddoso points out, is that these institutions are hardly operating in a free market environment. As conservatives have been saying for months, if the banks accept government money, they lose freedom of action and in effect, become tools of the state. The problem is that bank executives still think they are operating in a capitalist society. How rude the shock to AIG when the country went bonkers over what they see as the normal business practice of giving out end of the year bonuses? The bank execs are still operating under the old rules - B.A. (Before Obama).
Perhaps then, Mr. Kashkari doesn’t belong in the stocks. Maybe we could dress him up as a clown and put him in a dunk tank, three throws for a dollar.
But my main candidates for the stock treatment must go to those posturing, nauseating, hypocritical Members of Congress whose own ethics problems make them poor candidates to rail against the excesses of bank executives. Barney Frank will apparently hold hearings on the bonus issue. This should be excellent political theater as one of the Congressional questioners - Maxine Waters - has her own problems with protecting executives at banks that got bail out money.
Putting Waters and Frank in the stocks may be too good for them. Perhaps we can pillory the liberal Democrats as a warning to other lawmakers that being a hypocrite actually can cost you.
There is no shortage of potential candidates for the stocks in this business. How about the CNBC cheerleaders who rah-rahed the economy even when it was tanking? And there are a few Obama White House figures - press secretary Robert Gibbs comes to mind - who I personally would love to give a healthy thwack across the soles of his feet with a two by four.
And the President?
Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for “recklessness and greed” Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”
Tom Maguire responds:
It’s about our fundamental values? Which ones? Surely not “a deal is a deal.” These bonuses have been quietly kicked around for a while ($55 million was paid on this plan in December - did everyone at Treasury forget?), so I guess the fundamental value in play with Obama is “When the crowd stands up and boos its time to stand up and boo.” Yeah, that’s leadership.
IF WE’RE STUPID ENOUGH TO TAKE OBAMA SERIOUSLY WE ARE STUPID ENOUGH TO TAKE THIS SERIOUSLY:
Maguire has a point. The question must be “Who is minding the store?” more than whether AIG should have given these bonuses in the first place. The company showed lousy PR sense and a tone deafness with regard to how this action would appear to taxpayers. But they are no more or less guilty than the rest of the bankers who took us down this path to economic meltdown. And besides, the $165 million in bonuses represents about .001 percent of the bail out money received by AIG so far.
And what about the president’s analysis that what happened was the result of “recklessness and greed?” Is the government now to dictate what is “acceptable risk” and what is “reckless?” Is the desire to make a lot of money now to be criminalized? And by deflecting attention away from his administration’s failings by focusing on the AIG bonuses, is the Obama administration starting a pogrom against capitalists to keep public anger focused on “big business” and “the rich” and not on the lack of a plan to deal with the financial problems that worsen by the week?
The Washington Post thinks this will cost Obama political capital. I’m not so sure. I think this entire issue has been a godsend for Obama in that it redirects the focus from his administration’s incompetence in dealing with this crisis to something the average voter can understand - rich people getting richer at taxpayer expense. With Republicans jumping on the AIG bashing bandwagon, the issue becomes a bi-partisan free for all that makes people forget that Obama has not named any top Treasury officials for his administration yet, that he has not come up with a plan to stabilize the banks (despite promising 6 weeks ago that a plan was already developed), that his Treasury Secretary is a bust, that his economic team is not on the same page when it comes to analyzing the strength of the economy, and that his press secretary continues to amaze all of us with his utter lack of candor and confused - even ignorant - explanations for Obama’s non-actions on the economy.
Yes, it’s a shame we’ve abandoned using the stocks to publicly humiliate and chastize violators of the moral order. But judging by how some Congressmen and Administration officials have been demogouging the AIG bonus issue, ’tis a pity we’ve also forgotten about the grand old American tradition of tar and feathering.