more AIG

[mattycub]

In response to my post yesterday, Greg mondragon brought up a reasonable point. Since my response to it is as long as a normal post, I thought I'd repurpose it as a post. Double content generation points! Greg's comment:

I appreciate you taking the time to write this, but one question pops out at me: there are two assumptions here - one is that there are

Comments

[shake_it_up]

A couple of points-

Wall Street has always been its own entity, and it defines for itself the rules of capitalism. While the rest of the world, including your office and mine, if I had one, operates on more complex economic models which include multiple ways of motivating their workers, Wall Street and a couple of well-funded right wing think tanks insist that they operate under purely Darwinian principles. Cut-throat, driven to grab the margin and beat out the competition.

Well, for one thing, they have been running a Ponzi scheme. This has been obvious since the first Fannie Mae audits, 3 or 4 years ago. When the banks would start to go under was a common topic a year ago. And yet, without regulation they kept spinning and earning 6-7 figure bonuses.

What Liddy was saying was that there is no work ethic, because those people live in a Darwinian universe where they need extraordinary incentive to go to work. I guess they can take last year's bonus and sit in St. Tropez (not real busy right now) waiting for the turnaround.

He's also saying that these mega-corporations, mature organizations, have no redundancy and their work plan is dependent on these geniuses who can't be replaced. Public reaction is just taking these statements with a grain of salt.

Now, the lunatic response- please don't call that the populist response. I don't even agree with the Moveon.org's advice to throw virtual tomatoes at AIG, given personal threats to their staff.

A lot of the concern about the bailout is not just about the bonuses, but also about the monitoring of bailout monies. Half the people (me included) have doubts about the Treasury Secretary's capacity to manage the situation, given his closeness to Wall Street, and half want to undermine the Obama administration through attacking Geithner.

As for the work being a dead-end in the organization because they will wind down that product, I think that the organization will still want to innovate and find new areas of insurance and investment.

In the meantime, workers in other industries are happy to have their jobs. Here in California, taking off every other Friday may not seem like much, but it's a 10% salary reduction, generally without a reduction in workload. Good managers try to motivate their employees, regardless.

Your industry has rebuilt since the 2001 tech crunch, but I sure remember the impact in the Bay Area on people who had accepted moderately low salaries (say, $80 K annually) whose stock options turned to dust. They kept working, if they could.