PHUTATORIUS
A week has passed since the AIG bonus story broke, and we're all miraculously still alive. There have been no piano-wire executions or Japanese-style honor suicides. Oh, sure: Everyman's Hero Senator Grassley actually spoke the words "sucking the tit of the taxpayer" into an open microphone (Teat, Chuck. Teat is the word you wanted. You come from Iowa and I need to tell you this?), and the extreme circumstances apparently turned "tightening of sphincters" into a metaphor suitable for the House floor. Stunningly, a sitting United States President fell on his sword over the "scandal". Somewhere, just over the horizon, four dark men have mounted black horses.
More...
Oh, but there was more: AIG's CEO Edward Liddy made a "don't ask/ don't tell" argument to Barney Frank, who didn't to my knowledge used the word un-American, but in almost every other respect cut quite the Joe McCarthy figure in Banking Committee hearings. The President clearly had to fight hard not to opine on the constitutionality of the "we hate these people: let's tax them" legislation that cleared the House with bipartisan support. Bipartisan support? Really? The black horses are in full gallop and on the move . . .
And then there's the $165 million question (asked in two parts, at $82.5 MM each): What did Treasury Secretary Geithner know about the bonuses, and when did he know it? That's a fair question, after all, since (1) the bonus payments were agreed under the previous Administration, (2) under even older compensation contracts to which the government was not a party, and (3) the skeleton crew currently in place at Treasury is more than sufficient to review the flowdown of the hundreds of billions of dollars in TARP money that Geithner is charged with distributing. Q. What's the fastest way to get the Four Horsemen of the Apocalypse to leave town? A. Offer them deputy positions at the Department of the Treasury.
In short, the brouhaha and hullaballoo over these bonus payments is getting to be at bit much. And by "bit" I mean "a hell of a lot." I hate to quote Charles Krauthammer, but $165 million is CC Sabathia's Yankees contract: it isn't all that much in the big picture. And it's a bit rich for folks in Congress, of all people, to get all sanctimonious over this piddling amount — that last omnibus spending bill alone had 45 times that in earmarks, and 15 different Senators did more pet-project damage on that bill than AIG did with its bonus distributions.
But Phutatorius, those earmarks add value to local communities, and in many cases they advance important federal priorities, including jobmaking.
Fair enough, Brother/Sister: it is important to consider what we're getting for our money. But just as an earmark isn't necessarily a waste of money, a bonus payment to an AIG executive isn't necessarily a reward for lousy work. Take, for example, Gerry Pasciucco, whom Liddy brought in to clean up the mess. Pasciucco had nothing to do with the trainwreck in AIG's Financial Products division, and from what I read, he's doing yeoman's work, and doing it well. I wouldn't begrudge a fat bonus paid to Pasciucco: he's serving his company's interest, and the taxpayer's. But in the present climate, folks would rather discuss the apparent irony of him showing up at a garden party in a Che Guevara T-shirt. Pasciucco credits Douglas Poling, who received the largest of the bonuses at $6.4 million, with presiding over AIG's selloff of 80% of the Financial Products unit's bad assets. The proceeds of those sales will be returned to the government. An "outstanding job," Pasciucco says, but just try to tell that to the folks gathered outside of Poling's house with torches and pitchforks.
In a comment to WC Redneck's post on this last week, I wrote that I did not understand the compensation culture on Wall Street — or, for that matter, the tin ear for PR matters — that caused these bonuses to be paid, given the circumstances. But I was willing to listen. By the time this story reached its fullest flower later in the week, I was so turned off by the Congressional scoldings and media effusions of outrage that I find myself casting about for any reason to defend AIG. I may be an exception to the rule, but I'm sorry: this sort of populism doesn't work for me, especially when it's practiced by a bunch of dissipated, self-centered hacks who think acronym-riffing like "Arrogance, Incompetence, and Greed" passes for wit.
Populism in any form is unbecoming and unconstructive. I don't like it when it targets Communists, gays, and immigrants, and I don't like this kind, either. Can't we just drop all the posturing and anger and get on with fixing the economy?
Showing posts with label Recession. Show all posts
Showing posts with label Recession. Show all posts
Monday, March 23, 2009
Sunday, February 22, 2009
Kurt Vonnegut Saw This Coming
PHUTATORIUS
. . . or something like it, anyway, in his 1985 novel, Galápagos:
As it plays out in Galápagos, rioting, civil war, starvation and disease follow, and in the end (or rather, the beginning, as Vonnegut's ghost-of-a-narrator, Leon Trotsky Trout, tells the tale from a million years into the future) the last humans left alive are a gang of tourists, Ecuadoran refugees, and a ship's crew who find themselves shipwrecked on the island of Santa Rosalia in the Galápagos archipelago (say that five times fast). A million years later, these humans' descendants have evolved flippers and substantially smaller brains — advancements that, in the narrator-ghost's view, leave them much improved on their twentieth-century progenitors.
Did Vonnegut have it right? The last year has shown us Homo sapiens sapiens's capacity to outwit itself — and we find the fallout right where Vonnegut placed it two dozen years ago — in the delusional world of high finance. Could it be that our brains really are too big for our own good?
I think Kurt oversimplifies things a bit. If there's a big evolutionary flaw in the species, it's not that our brains are too big. It's that certain areas of our brains are overdeveloped, at the expense of others. The Ancient Greeks had two words for knowledge: tekne and sophia; these terms roughly correspond to "know-how" and "wisdom." It seems to me our tekne tends to get out ahead of our sophia, usually by about a decade or two. It's the tekne in us that enables us to develop intricate, destructive works of artifice like the atomic bomb and the collateralized debt obligation, and only years later does our sophia show us how our celebrated tekne has worked us into a corner. If only the sophia side of our big brains were more advanced, we might find ourselves in better stead.
It ought to be a sign unto us that the world's foremost economic minds (our vaunted "technocrats") crapped out in predicting the present state of affairs, but a wicked Juvenalian satirist like Vonnegut (a "philosopher?") saw it all coming as far back as the 1980s. Somewhere Vonnegut's own ghost is narrating today's events to a chuckling audience — and my guess is that he's taking no prisoners in the telling.
Love ya, Kurt.
. . . or something like it, anyway, in his 1985 novel, Galápagos:
The thing was, though: When James Wait got there, a worldwide financial crisis, a sudden revision of human opinions as to the value of money and stocks and bonds and mortgages and so on, bits of paper, had ruined the tourist business not only in Ecuador but practically everywhere.More...
* * *
Mexico and Chile and Brazil and Argentina were likewise bankrupt — and Indonesia and the Philippines and Pakistan and India and Thailand and Italy and Ireland and Belgium and Turkey. Whole nations were suddenly . . . unable to buy with their paper money and coins, or their written promises to pay later, even the barest essentials. Persons with anything life sustaining to sell, fellow citizens as well as foreigners, were refusing to exchange their goods for money. They were suddenly saying to people with nothing but paper representations of wealth, "Wake up, you idiots! Whatever made you think paper was so valuable?"
* * *
The financial crisis, which could never happen today, was simply the latest in a series of murderous twentieth century catastrophes which had originated entirely in human brains.
As it plays out in Galápagos, rioting, civil war, starvation and disease follow, and in the end (or rather, the beginning, as Vonnegut's ghost-of-a-narrator, Leon Trotsky Trout, tells the tale from a million years into the future) the last humans left alive are a gang of tourists, Ecuadoran refugees, and a ship's crew who find themselves shipwrecked on the island of Santa Rosalia in the Galápagos archipelago (say that five times fast). A million years later, these humans' descendants have evolved flippers and substantially smaller brains — advancements that, in the narrator-ghost's view, leave them much improved on their twentieth-century progenitors.
Did Vonnegut have it right? The last year has shown us Homo sapiens sapiens's capacity to outwit itself — and we find the fallout right where Vonnegut placed it two dozen years ago — in the delusional world of high finance. Could it be that our brains really are too big for our own good?
I think Kurt oversimplifies things a bit. If there's a big evolutionary flaw in the species, it's not that our brains are too big. It's that certain areas of our brains are overdeveloped, at the expense of others. The Ancient Greeks had two words for knowledge: tekne and sophia; these terms roughly correspond to "know-how" and "wisdom." It seems to me our tekne tends to get out ahead of our sophia, usually by about a decade or two. It's the tekne in us that enables us to develop intricate, destructive works of artifice like the atomic bomb and the collateralized debt obligation, and only years later does our sophia show us how our celebrated tekne has worked us into a corner. If only the sophia side of our big brains were more advanced, we might find ourselves in better stead.
It ought to be a sign unto us that the world's foremost economic minds (our vaunted "technocrats") crapped out in predicting the present state of affairs, but a wicked Juvenalian satirist like Vonnegut (a "philosopher?") saw it all coming as far back as the 1980s. Somewhere Vonnegut's own ghost is narrating today's events to a chuckling audience — and my guess is that he's taking no prisoners in the telling.
Love ya, Kurt.
Friday, February 20, 2009
Thursday, January 22, 2009
"Hotels Trim Amenities Amid Recession"
WHITECOLLAR REDNECK
The WSJ has a nice article this morning about how struggling hotels are cutting back on frills because of the economy. It begins, "The Courtyard and other Marriott chains recently stopped putting hand lotion in their rooms, leaving guests to ask for it at the front desk."
So who feels comfortable stopping by the front desk and saying "Excuse me, I couldn't help but notice there's no hand lotion in my room, can you have the bellhop run some by?" I mean, why don't you just ask them to deliver a whole, raw, plucked chicken and the November issue of Juggs while you're at it, since they're going to assume you're a pervert anyway? Jiminy.
The WSJ has a nice article this morning about how struggling hotels are cutting back on frills because of the economy. It begins, "The Courtyard and other Marriott chains recently stopped putting hand lotion in their rooms, leaving guests to ask for it at the front desk."
So who feels comfortable stopping by the front desk and saying "Excuse me, I couldn't help but notice there's no hand lotion in my room, can you have the bellhop run some by?" I mean, why don't you just ask them to deliver a whole, raw, plucked chicken and the November issue of Juggs while you're at it, since they're going to assume you're a pervert anyway? Jiminy.
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