08 October 2008

After Bailout, AIG Executives Head to Resort

This was in the Washington Post


After Bailout, AIG Executives Head to Resort

UPDATED: 11:31 a.m.
Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000, Rep. Henry Waxman (D-Calif.) said today at the the opening of a House committee hearing about the near-failure of the insurance giant.
Showing a photograph of the resort, Waxman said the executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa.
"Less than a week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation," Waxman said. "We will ask whether any of this makes sense. "
While AIG was at the bar begging and drooling for money, this is one of the things that AIG did to battle the crisis:
Those documents show that as the company's risky investments began to implode, the company altered its generous executive pay plan to pay out regardless of such losses.
This is like having overdraft protection on your checking account without worrying about having to repay it if you do overdraw.


What is also interesting are some of the comments posted by readers of the article in question. Basically most of what is said is that Congress should do something about it, pass laws, go after them, all that. I agree, Congress should do something about it.

But the question remains, why are we pouring money into symptoms instead of addressing the problem? The problem is a philosophy that says that "every course of action should have the potential to make money from it." It's okay to make money, but this philosophy shifts moral and ethical boundaries.

For example. some will say we should address the issue of global warming, but one of the primary consideration is how to make a profit from it? A friend of mine decided that he could make a lot of money by going green, marketing products and services. He set up a blog, went into business, but it didn't happen. What did happen is that all the reading and investigating that he did to understand this issue caused him to undergo a radical transformation, and he is now solidly green. He still wants to make money from the issue, but his philosophy drives his world view and his ethics and his mission, and he is a better person for it.

Another problem with yelling to congress to fix the problem is that we abdicate our own responsibility in the issue. Congress, like those in leadership at AIG, Bear Stearns and all the other companies have one issue that drives them --Power. Because of this, they manipulate people to achieve and retain that power, market fear and assess blame when things don't go well. The result is that we have our options severely limited and dictated to us, which as we have seen are not real options at all.

And if the "leadership" doesn't deliver or produce, what do we do? We throw them out and put another bunch of leaders in place, who turn out in the long run to be no different then the bunch we threw out earlier.

The focus is then on the problems that need to be solved. We want solutions and answers, people who can articulate the problems, but who will in the long run dominate the conversations.

They will be people who are defined by their self-interests, and power will eventually be lumped into the hands of a selected few who have too much vested interest in the outcome of the problem.

We buy into the illusion that after we find the guilty part and assess blame, we can then legislate or change policy or somehow mandate morality. It hasn't happened yet, why believe that it eventually will?

So things have to change. Acting morally is not the same as being moral. Individuals feel they have no power or voice in these issues. People will gather under the auspices of someone (usually with some vested interest in the issue), ostensibly giving them a voice, but are offered options that only fit into interests and goals of the person or persons in charge.

How to do this is another conversation for another post. I would suggest reading Community: The Structure of Belonging by Peter Block.

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