I’m Outraged At The Outrage
Outrage is the new word of the moment. Chances are you, right now, you are probably outraged at somebody. Perhaps you’re outraged that Denise Richards was voted off “Dancing with the Stars” last night. Perhaps you are outraged that American Idol was preempted for the Presidential primetime press conference last night. Perhaps you are also outraged about “bailed out” companies paying their employees bonuses. If that’s the case, perhaps you need to think through this issue a bit more.
We in the US have what is, mostly anyway, a capitalist economy. Control of business rests with the private sector. Businesses are supposed to make decisions that are in the best interests of shareholders or investors. When a company decides to pay a bonus to its employees based on some sort of performance metric, that’s their decision to make. It is also in the best interest of employee retention to keep the promises made.
So AIG got a large bailout from the government (whether it should get one in the first place is another topic). It then proceeded to make good on its promises to employees. In large part due to media attention, the public became outraged that government bailout money was being used to pay bonuses to “employees who ran the company into the ground.” While I’m sure at least a few employees contributed to AIG’s poor decisions, I’m sure there were many others that were not involved at all. These employees hit their performance targets for the bonus and were paid accordingly. What is wrong with that? The New York Times has published a resignation letter from an AIG employee who received such a bonus.
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in — or responsible for — the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
If this guy were an auto worker, plumber, or some other union job and had his company promised bonus stolen from him by politicians, he’d be turned into a hero. Unfortunately for him he is a highly productive and highly compensated executive. Because his bonus number is in the 6 to 7 figure range, the average American expresses what is actually jealousy, as outrage. So while those responsible for the mess at AIG have (wisely) disappeared, those that are left and are actually trying salvage something for the American taxpayer are thrown under the bus. For the average American, knowing the whole story is not necessary, making a stink about it is.
This unwillingness of Americans to actually seek out the whole story before passing judgement outrages me. Even if you don’t like it, you still have to play by the rules. These employees were promised bonuses for hitting performance targets. If they hit their targets, they get paid. There really isn’t much to understand. Be jealous if you want, but outraged? If you really want to be outraged let’s think of some real abuses of the American taxpayer. At McDonald’s, the person who takes your money and puts it in the register gets paid ~$6.15 an hour. At the highway tollbooth, the person who takes your money and puts it in the register gets paid ~$30 an hour. Why is there such a large discrepancy? In private business, pensions have largely been replaced with 401k’s. Fulfilling pension obligations is something that’s seen as far too expensive. Yet for government employees, pensions still reign supreme. Shouldn’t there be some concern for the American taxpayer that the pension obligations are too expensive? Yet we never hear about these outrages.
Next time you’re feeling outraged I encourage you to get the whole story first. You might be surprised what you learn.
