Editorial
I doubt I’ll offend too many by comparing AIG financial services executives expecting to cash huge bonus checks at taxpayers’ expense to racketeers. While it’s probable that the law is on their side, when it comes to scruples I can’t think of a better analogy. So after hearing a week of posturing by politicians and pontificating by talking heads (and politicians) I can no longer resist the urge to put in my two cents’ (or is it billions’) worth.
The one thing everyone seems to agree on is that the wolves in designer clothing closely examined the rules and then figured out the best way to exploit the game. Add to that the fact that the government, ostensibly due to legal concerns, conveniently provided the same players with a loophole large enough to drive a Brinks truck through and we find ourselves in the midst of a $165 million scandal that has consumed the public consciousness to the point that two wars, the rest of the global economic meltdown, and the wacko with eight newborns have all but faded from view.
Fine. But now how do we deal with these bastards?
The answer is actually quite simple, and ironically, it’s something that property/casualty insurance companies (though not necessarily AIG) have been doing for years to avoid paying off on losing bets. Exploit the system.
Thanks to tight regulatory controls, whole life insurance has long been and remains one of the great financial safe havens. And let’s face it, dead is dead — there’s not a lot of gray area for lawyers to argue over. Other contracts, however, usually provide room for debate. Just ask any of the Hurricane Katrina victims whose insurance carriers denied their claims arguing that damage caused by the storm surge was ‘flood damage’ (not covered) as opposed to ‘windstorm damage’ (covered) to avoid paying an unprecedented and potentially devastating number of claims. It was a calculated gamble. Any actuary (most of whom are employed by insurance companies) will tell you that only a certain percentage of claimants will have the will or the means to fight for their rights in court.
This is where the racketeer analogy can and should be exploited. There is only one thing that most racketeers value more than money, and that’s anonymity. The fact that only three names of AIG bonus recipients have been made public shows us that the racketeer mindset exists. The piranhas fear becoming pariahs. So why not tell them that their claim to the bonus money is invalid and if they want to collect, they’ll have to sue? They’ll have to emerge from the comfort of the shadows, expose themselves to light of day, and explain to a judge and jury, on the public record, why they deserve to collect. Let’s face it, anyone who’s gotten to the to the level of seven figure bonuses has probably already made quite a bit of money and has the means to sue. But how many of these anonymous shadow dwellers have the will?
And for those who do, assuming the law is on their side and it winds up costing the taxpayers just as much or maybe even a little bit more than the current $165 million, at least we’ve sent a loud and clear message that the old game is over, the rules are changing, and the culture must change with them.
At least that would be an investment, not a handout.