Politics and Decimal Points

Congress needs to take a remedial math course. Congress is going to excoriate the President of AIG today - a president, by the way, who is working for a salary of $1 per year and who was hand chosen by the Treasury Secretary Paulson to replace the deposed executives of the too big to fail company. Liddy is going to be embarrassed, regaled and accused of being evil. Congress will likely ask for his resignation and send this "public" servant off to a final retirement of shame. For what? Liddy failed to ignore contracts, legal contracts, made by the company, for the payment of executives who continued to work for the company, in good faith, to work the company out of whatever troubles it was in or is still in. Without those people, both in the credit default swap group or the auto insurance or any of the other plethora of insurance businesses of the company, the company would just have gone out of business. A company is its people.


What would Congress want the company to do? Fire everyone, default on the contracts to people who had seen their own investments in their employer go to near zero? Remember, that at the level of compensation that we are discussing, the governments of New York State and the United States will get about 50% of the bonuses back in tax payments. Which brings me to the final point - the decimal point. Assume that AIG's credit default swap insurance contracts that had claims that the government bailout paid for total $ 150,000,000,000 ($150 billion). The bonuses to the employees total $150,000,000 ($150 million) That works out, check my math, to 1/10th of 1% 0.1%. That's the cost of doing business Mr. Congressman. Would it have been more honest - more political expedient to fire all the executives, leave the company offices empty and turn the claims over to vote of the public. That would mean that the world financial system would have crashed, banks everywhere that were reimbursed by the AIG insurance payments would have gone under and probably we would all be burning furniture to stay warm this winter like 1918 Russia.

Kanjorski, Chairman of the Capital Markets Subcommittee, is going to make Mr. Liddy seem evil and in cahoots with some group of mysterious coordinators of doom. I've got to stop typing now, a rerun of Conspiracy Theory is on the movie channel. Give me a break. Sphere: Related Content