People love to compare dire instances that involves them or people close to them with some of the lowest points in history. Sometimes, these comparisons are worthy and understandable, and sometimes they are not. Following the economic collapse of 2008, people were justifiably angry at those who caused the collapse and almost ruin of America. As with any incident, there is always a cause and/or a catalyst that puts these things into motion. Sometimes, it is a person. Other times, it is an event. Regardless, these disasters just don’t materialize out of thin air with no provocation.
In an interview with the Wall Street Journal, AIG’s Chief Executive Robert Benmosche attempted to make one of those comparisons between AIG workers and one of those dark history moments. From the WSJ:
Mr. Benmosche on the government’s campaign against partial “bonuses” to be paid to hundreds of employees in the AIG financial-products unit as they unwound massive, ill-fated bets on mortgage bonds. He said “less than 10” employees were behind the bad trades.
“That was ignorance … of the public at large, the government and other constituencies. I’ll tell you why. [Critics referred] to bonuses as above and beyond [basic compensation]. In financial markets that’s not the case. … It is core compensation.
“Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] … They understand the derivatives very well; they understand the complexity. … They’re all scared. They [had made] good livings. They probably lived beyond their means. …They aren’t going to stay there for nothing.
The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.
“We wouldn’t be here today had they not stayed and accepted … dramatically reduced pay. … They really contributed an enormous amount [to AIG’s survival] and proved to the world they are good people. It is a shame we put them through that.”
Now, I can understand his being upset over the anger directed at AIG, whether that anger was justified or not. However, WTF was he thinking when he tried to compare the anger targeting AIG with lynching in the Deep South??? I don’t recall any AIG employee being found strung up in a tree. I don’t recall any AIG employee’s home or place of worship being bombed. I don’t even recall any AIG employee being arrested, charged, or convicted in regards to their part in the economic meltdown.
Jump into the time machine, and it’s easy to see why there was anger at those bonuses. The very unit that almost ruined the company was set to distribute $165 million in bonuses to around 400 employees. Given that AIG had received in excess of $170 Billion in taxpayer’s dollars, and most anybody would agree that anger was justified. How can your performance result in you getting a bonus of more than $3 Million (seven execs in that unit were scheduled for such bonuses) when your performance nearly decimated your company and would have taken out half the world’s economy as a result?
What he said in that article was very hurtful and demeaning to the families of people who lost love ones to those REAL lynch mobs. What happened decades ago will forever be a stain on the fabric of America. Thousands upon thousands of people, both Black and White, were lynched in the United States between the Civil War and the Civil Rights Movement. Not a single AIG employee was arrested for their role in the credit default swaps crap. That he would compare the two is yet another example of how out of touch the 1% is with the rest of America. A quote often attributed to Abraham Lincoln says it best, “Better to remain silent and be thought a fool than to speak and remove all doubt.”
*Update: As expected, Benmosche quickly walked back his statement.
American International Group Inc. chief executive Robert Benmosche said Tuesday that he regretted his phrasing when he compared the outrage about banker pay during the financial crisis to inflammatory rhetoric from the civil-rights era.
- AIG’s Benmosche and Miller on Villains, Turnarounds and Those Bonuses (blogs.wsj.com)
- AIG’s Benmosche Backs Off Inflammatory Comments (blogs.wsj.com)
- Lynchings: By State and Race, 1882-1968* (law2.umkc.edu)
- Lynchings: By Year and Race (law2.umkc.edu)
- AIG CEO: Anger over AIG bonuses ‘just as bad’ as lynchings (washingtonpost.com)
- CEO Benmosche Compares Outrage Over AIG Bonuses To Lynching Blacks (crooksandliars.com)