Drop in a bucket

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LuMac wonders aloud (email-wise, at least):

I... wonder what this relatively little (dollar wise, not symbolic wise) spat is distracting us from.

He is referring to the "mounting populist backlash" about the AIGFP retention bonuses that were given to executives after they had already bolted from the organization. I take his point, but I don't think the dollar amount of this corporate stunt-looting exhibition is relevant, and likewise I don't think it will really distract us from issues that schmucks like this want us distracted from.

First point: I agree that the dollar amount of the bonuses is trivial when compared with a trillion dollars or two. But in the case of a bankruptcy, a broken contract, a burglary, shoplifting --- whatever --- the law doesn't make many distinctions in how the loser or the guilty party is treated based on the amount of property involved. There are distinctions between "petty" and "grand", and undoubtedly some other ones I'm not aware of, but I find it unlikely that the courts are often admonished to look the other way because the value of property involved is trivial. No: these Bonus Babies are in fact being awarded mindblowing amounts of money for a highly visible and destructive failure in competence and ethics. If we're going to make financial comparisons, these bonuses amount to 10, 20, or more years of income even for a family earning $100,000 annually. The idea that the Bonus Babies are contractually entitled to these awards should be declared officially ludicrous by AIG shareholders and all parties who hold effectively void AIG contracts or the worthless "investment products" created by AIGFP. It is highly unlikely that the IRS, the Justice Department, the SEC, etc., could not find a large handful of airtight legal reasons to "abrogate" the AIGFP performance and retention bonuses; all they need are some facts and figures to wave in front of a few warty, sweating bankers sitting on card table chairs under bright lights.

Everybody knows that the most spectacular robbery of all times is unfolding in front of us. The U.S. Treasury is being looted by people who have mounds of money and influence that they simply assume they will get their way in the end. And why not? It now appears that people in Obama's Treasury Department and the Senate are complicit in granting these toads whatever wish is their command.

This kind of thing has been happening for decades, but somehow it has never initiated a critical mass of public fury. Mike Milken became the first superstar performance artist of financial fraud during the '80s, and the son of a sitting vice president --- Neil Bush --- was up to his eyeballs in the savings and loan collapse in the late 1980s. Financial crime sprees have been swept under the rug for 30 years, and I never sensed significant public outrage about it. But never has the pure cause-and-effect of it been this naked, and never has the economic collateral damage aproached these levels (with more to come, surely). One hopeful sign, to me at least, is that even the corporate media may be losing its ability to obscure these facts now, possibly because there are legions of unemployed, underemployed, and just plain scared and angry people who have ample time to watch Stewart and Colbert every night, and are motivated to make noise about it.

Second point: I don't believe that Bonusgate (let me be the first to use the term, thank you very much) is going to distract many of the key stakeholders in the U.S. economy for very long. I don't remember a more unstable political or legal situation since the Watergate era. The current epoch differs from 1973 because there is a large, educated, highly motivated segment of the population with powerful research and communication tools. The public was never in such a strong position to pressure both their elected officials and, even more importantly in my opinion, the corporate press. Information wants to be free: if the media don't release it to the public, then it will find its way to us (and eventually the media) via independent web-based journalists and bloggers. And I don't mean bloggers like me --- I mean bloggers who are working economists, attorneys, IT specialists, and reporters.