Do as They Say...
AIG received bailout money and shortly after that, executives went on an expensive junket and Congress, along with the rest of the country, was irate. I'm sure we've all heard the story.
There's two things in this that are ridiculous:
- The AIG executives had a history of mismanagement. That they were left in place and no incentives were made to correct their actions, no one should be surprised that they kept on doing what they've been doing. The underlying message was clearly "You've done everything right, sometimes these things just happen, let us fix that for you."
Except that wasn't the case. They had done things wrong. They had violated good banking practices and thrown proven lending practices to the wind for short term profits. The banks are legal entities that will outlive, if managed, any executive. While the bailout was wrong, I can't believe that a change of management wasn't part of the package, though I think there is a reason for this.
- Our government runs a deficit, then raises taxes to cover it. They bail themselves out, constantly, all the while going on junkets and 'fact finding' trips. The hypocrisy of Congress being irate over the AIG executives is missed by most.