Spitzer and AIG

People are understandably upset about the AIG bonuses - if a handful of guys bring down one of the largest companies in the world, they really shouldn't be getting $1+MM paychecks. Fine, that's settled, let's move on.

The NYTimes reports that Eliot Spitzer has now cautiously weighed in on the subject, pointing out that the flap about bonuses is peanuts relative to the fact that AIG has actually passed out billions of dollars in bailout money to its trading partners, with the implication that the now $170BN AIG bailout is essentially a second round of TARP infusions. This is a fine point - people are spending way too much time and energy on a handful of guys and their paychecks. It's a problem, it's very unfair sounding and should be dealt with, but let's be clear here: the future of the financial system does not depend on the size of their checks. At least, it didn't until it became a political issue that now threatens to eclipse all of the more substantive things.

The other part of Spitzer's point, whether or not the government should be in the business of making AIG's counterparts whole, is a bit trickier and I won't go into it here.

What I find ironic is that Spitzer is making a point about how major, substantive issues are being overshadowed by more easily politicized, but ultimately less significant ones. This coming from the ex-governor of NY who single-handedly beat down Wall St., but was then ultimately forced out because he paid for sex with a woman that wasn't his wife. And you see this in the article written by the Times, which tacitly questions whether or not Spitzer is in any position to speak on "ethical behavior."

I think this inability of American society to get past little things is a major roadblock in our thinking. In a world that is growing more complex by the day, the number of people that are actually equipped to handle events just seems to get smaller and smaller all the time. It would seem to me that the last thing we would want to do is make that number even smaller by adding on either random or relatively inconsequential criteria. The days when we can find ultra-pure, blemish free leaders that are actually mentally equipped to do their jobs just strikes me as being completely over.

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