THE ARROGANCE OF AIG

About 15 years ago, when I was working in corporate treasury, my company’s insurance broker asked me to write a letter to him expressing my experience in dealing with AIG as the carrier of our Liability and Workers Compensation coverage. My response was that the AIG representatives behave in such an arrogant manner that one would think that you were dealing with the Department of Motor Vehicles. The recent announcement that AIG would be paying in excess of $165 million in bonuses convinces me that nothing has changed.
Remember, AIG is a company that has required tens of billions of dollars in bailouts from the government in order to avoid cascading failures to the world economic system. In addition, AIG’s losses have been larger than the GDP’s of many medium countries. Yet, the executives of AIG have the arrogance to believe that they are entitled to huge bonuses. Yes, I said entitled. Executives at AIG believe that they entitled to receive a form government transfer payments similar to the welfare system. However, these payments go to those who are well off: Welfare for the rich. The executives will claim that government money isn’t paying the bonuses. If that is the case then AIG doesn’t need the $165 million and the government payments should be reduced by value of the bonuses.
I fear for the future of the United States. We have gone from a country where Adam Smith’s enlightened self interest has changed into the arrogance of greed. I cannot think of any behavior which could do more to convince Americans that there is something wrong with the capitalist system. The executives’ actions could not do more for advancing socialism than they could if they were on the payroll of the Socialist or Communist parties.