Skiing has become a little challenging lately. Each day there is a brief window of perfect corn snow between brutal hardpack and knee-destroying slush. In a space of about one lift ride, the snow can go from too hard to just right, and then to too soft. So you end up moving around the mountain, following the sun, then looking for shade before finally just looking for lunch. The good stuff is out there, but you have to be on the move. There are a lot of tourists in town, many of them skiing right up to closing time. Have at it, folks, it’s all yours.
The other day a bunch of us were sitting out on the deck enjoying the sun and conversation turned to our bonuses. Like most Americans, we received our annual retention bonuses last week. I’m sure you got yours, too. None of us work in the financial services industry, so our bonuses were not quite as big as the $22 million some of the people at AIG got. Still, everybody got a bonus, right? With all that money fattening our wallets, conversation quickly turned to how we were going to spend it. One guy bought a beer. I spent mine on a brownie. Another said he was saving up to buy a new roll of duct tape to repair the tear in his ski pants. We’re living large.
Of course, the outrage of the week is that welfare recipient AIG spent $165 million of taxpayer money to give bonuses to employees in the very division of the company that effectively bankrupted it and helped crash the world economy. The president of the company, Edward Liddy, said that it was important to pay the bonuses to retain the kind of talent needed to destroy the world economy. Talent like that isn’t cheap. When that didn’t fly, he testified before Congress and, with a slight tear in his eye, said that he didn’t want to pay the bonuses but was contractually obligated and couldn’t avoid it without risk of a lawsuit. AIG is an insurance company. It knows something about weaseling out of contracts. The sanctity of contract the very foundation of our society cannot be violated. (Offer void in Michigan, or in contracts involving pensions for auto workers, pilots or other collective bargaining agreements, and mortgages.)
The U.S. government owns 86 percent of AIG. It’s like the Post Office. Outrageous as the AIG payments are, I’m even more angry at Congress and the White House (Bush and Obama share this one) for their failure to apply reasonable controls on the use of the bailout money. In fact, it sounds like a prohibition on bonus payments was mysteriously removed from the legislation authorizing the last bailout. Senator Charles Grassley from Iowa actually suggested that the AIG management should to the honorable thing and commit suicide, Samurai style. It’s a start, but the good senator, whose failure to do his job allowed this to happen, ought to be sharpening up his own sword.
It’s really gone beyond absurd. The only decent commentary on this mess has been coming from Jon Stewart. Stewart last week raised the point that there are three 24-hour business news channels on cable. Not one of them saw this coming, or asked any questions about where an economy built on shaky credit was headed. In a great presentation, he showed CNBC loudmouth Jim Cramer giving assurances that Bear Stearns was a solid company just days before it collapsed. A few days before, he was recommending the stock as a “buy.” It was just one of several examples of where they got things completely wrong.
Stewart and Cramer sparred on different shows for several days, and then Cramer came on Stewart’s show. Stewart didn’t budge an inch, and Cramer failed to defend the indefensible. The so-called experts, who spend 17 live hours a day interviewing uber-experts, didn’t see this coming. They didn’t have a clue. Nobody asked a hard question when a CEO was insisting that everything was sunshine-and-lollipops with a balance sheet that a third grader could see didn’t add up.
Stewart made the point that if the business journalists, who are supposed to be experts in this, had asked a few serious questions, much of this mess might have been exposed early, and possibly avoided. It’s the same thing with the war in Iraq. If the White House press corps had actually asked questions and done some research into the lead up to the war, there might not have been a war at all.
It’s really a dark day when the most serious news coverage on TV, with the most depth and tenacity, is coming from Comedy Central on what is advertised as a “fake news show.”
Tom Clyde served as Park City attorney in the 1980s and is the author of “More Dogs On Main Street.” He has been a columnist at The Park Record for more than 20 years.