Welcome to George Bush's America, where the people who lead borrowers down the primrose path to foreclosure are set to reward themselves for one of the biggest failures in corporate America amounting to the biggest governmental bailout in history. Shall these folks be allowed to get their bonuses, or not?
Discuss.
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One-tenth of one percent
$160m (bonuses) / $160b (bailout)
If $1 in every $1000 you spent could buy better performance, would you risk not spending the $1?
160000000/160000000000=0.001
0.1 percent
In business, wrong! is easy to identify; right! never is. You know precisely where the money goes, but never where it comes from, because income emerges from the totality of everything you do.
The bonuses aren't the problem
AIG's counter-parties were financial sophisticates who should have known that they were placing bets with an entity that couldn't possibly pay off if they won. When it came to settling these bets, AIG should have said, 'Eat your losses; we aren't going to pay you, we have no money. Litigate and lose. Force us into bankruptcy and get nothing.' Not paying would ruin AIG's business, but so what? gambling isn't a valid business anyway.
Why is the US taxpayer involved? Because the US government forgot that when a business owes *enough* money, it owns its counter-parties as much as it is owned by them. No need for intervention, they'll work it out between themselves.
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