Wednesday, March 18, 2009

Bonuses for AIG: Polishing the Turd

When you work in Washington, you learn lots of interesting expressions, many of which deal with putting the best face on a disaster of some magnitude. Two of my favorites are "putting lipstick on a pig" and "polishing a turd."

"Putting lipstick on a pig" (sometimes referred to as "porcine cosmetology") infers, of course, that that no matter how much you dress up the pig, it's still a pig. "Polishing a turd," on the other hand, has a somewhat dual meaning: first, that you need to work really hard to make a nasty task turn out well; second, that this is virtually impossible to do.

Or not.

Here, we see a typical corporate spokesman attempting to explain why AIG should be allowed to spend millions of dollars of taxpayer bailout money to pay bonuses to the people who helped wreck the economy:

And here, you can see the dedicated staff at the Mythbusters television show demonstrate how you can, in fact, polish a turd. Well, it's not exactly a turd, and they're not exactly polishing it, but it gets the idea across.

Perhaps they are the ones who can finally give a good explanation of why we should be expected to reward not just failure, but outright criminality.

Have a good day. More thoughts tomorrow.

Bilbo

14 comments:

The Mistress of the Dark said...

Personally I kinda agree with what that one congressman said about what the receivers of those bonuses should do. I don't even really care if its not PC.

Leslie David said...

I guess that given the choice between death and dishonor they'd pref3er dishonor. My company's 401k plan is with ING which is part of AIG. I'm not contributing and I'm going to write to my company and ask them to find a more reputable company to do business with if there is such a thing. Here's what I don't understand--by bailing them out we're shareholders and they work for us, so we should be able to attend stockholder meetings, and make sure they do what we the stockholders want, or dismantle the company. Why can't we force them to give up the cash that way?

michelle said...

i didn't realize ING was part of AIG! hmmm i may be doing some research later today.

i really hope congress gets the money back... via tax or whatever, and this whole debacle is giving me the the impression that Geitner may be in over his head :(

Mike said...

On Charlie Rose last night the had people explaining the AIG thing. They said the payouts weren't really bonuses. They were retention payments. In other words AIG was paying the people that screwed up not to leave.

fiona said...

I'm gonna stop wearing lipstick...sighs...

bandit said...

The only one doing an honest days work to the best of his ability is the dung beetle.

The word "turd" is an interesting one. Where did it originate from and why is it spelled with a "u" and not an "i" or "e"?

tard....being punctual

Bilbo said...

Andrea - remind me not to piss you off...

Leslie - good luck with that...

Michelle - "debacle" is a word getting an unfortunate amount of line space nowadays, eh?

Mike - that's how I understood it. I wish my company would let me screw up, then pay me a bonus to stay so I could screw up more...

Fiona - a little polish never hurt anyone...

Bandit - I agree. As for the spelling of "turd," well, I've never given it much thought. Nor am I likely to. Sorry.

Jean-Luc Picard said...

There has been a lot of controversy about bonuses paid to bankers here in Britain.

SusieQ said...

Some in Congress want to tax this bonus money to the tune of 90%. That may seem like a good idea to most Americans. But the fact is even if a bill like that were to be passed, it would be unconstitutional and would fail that test. It is unconsititutional for the government to select only certain individuals to tax. That is my understanding.

I think AIG should have tried really hard to negotiate with the bonus recipients and get them to forego their bonus money or at least some of it. I don't believe we have all the facts on this AIG bonus thing. For instance, when did the powers that be in D.C. learn about these bonuses? I heard that they learned about them over a year ago.

KKTSews said...

SusieQ, I doubt a year ago....I know it seems like this whole thing has been endless, but a year ago most of us were fat, dumb and fairly happy even though the bottom had fallen out of the real estate market, the rest seemed to be fine. Folks in Washington were not looking into bonuses anywhere bu their own bank accounts.
As I understand it, AIG is a mess because it was insuring a lot of these flaky/questionable financial "products" which have all failed. Now AIG is a big company, and the question I haven't seen answered is just exactly who is getting these bonuses and are they they ones who were working the flaky "products". If so--no bonus seems reasonable, practial, justified. If, on the other hand, they were working hard to keep AIG as afloat as it is, or in a completely unrelated part of the company, then the bonuses, while outrageous in size, are at least defensible.
I just have never thought anyone deserves to earn multi-millions each year, no matter who they are.

Moose said...

This makes me really not want to pay my taxes this year.

SusieQ said...

KKT, I heard that Geithner would have known a year ago about these bonuses. Others in Congress knew about them well in advance because legislation was written to protect these very bonuses.

Maybe certain politicians are just pretending to be appalled by these bonuses. Maybe it is just an act for our benefit. Like I said before, we don't know the whole AIG story yet.

Do you think it is appropriate for the government to limit the compensation amount which these executives receive? Some people in Congress have talked about limiting it to $500,000 a year. That is stupid. How do they expect to retain or acquire qualified executives at that compensation amount? I don't know why compensation runs into the millions for these executives. Maybe it has something to do with the law of supply and demand. I just don't know.

Bilbo said...

Jean-Luc - Misery loves company, I guess!

SusieQ and Katherine - you're both right. On the one hand, we need to know the full story of the bonuses, and exactly who they're being paid to. If it's to people doing real insurance work and generating revenue, that's one thing...if we're paying (bribing) the people who wrecked the company to stick around so they'll help sweep up the debris, that's another. We need the whole story.

Moose - I'm with you!

Confessions of a Temporal Lobe said...

I wish I could make a million bucks polishing turds for a living.