Fixing the Financial Mess Would Be Easier if We Weren't Dealing with the World's Worst Scumbags

Posted by Joshua Holland, AlterNet at 11:56 AM on October 9, 2008.

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After shelling out $85 billion last month to shore up the books of financial giant AIG -- which is heavily invested in the huge, shadowy and wholly unregulated market for "credit default swaps" -- the Fed authorized another $38 billion in government-backed loans yesterday.

That action may well be a small but necessary step in protecting the larger economy, but it is extremely hard to swallow given that 70 AIG execs went on a half-million dollar junket to a resort spa just a week after the last bailout. Included in the tab at the tony St. Regis resort on the California coast was $150,000 for meals and almost 25 grand worth of spa treatments.

According to the Washington Post, Martin Sullivan, the former AIG chief executive whose "three-year tenure coincided with much of the company's ill-fated risk-taking," is receiving a $5 million dollar performance bonus, and Joe Casano, "the financial products manager whose complex investments led to American International Group's near collapse," is raking in $1 million per month in consulting fees. His task? Sorting out the obscure investment instruments created on his watch.

Just days after Lehman Brothers went belly-up, the bank's foreign staff were outraged to discover that a $2.5 billion bonus pool established before the firm went into bankruptcy would be paid out to Lehman's New York Staff -- an average bonus of a quarter million dollars each.

Imagine how much easier this "bailout" process would be if we weren't dealing with some of the most privileged, arrogant bastards this country has ever produced, and if many of them weren't still living the high-life. The gall of the titans of the financial sector is simply unprecedented.

One has to wonder how much of their excesses is driven by the fact that they have no serious fear of retribution, legal or otherwise. In late September, the CEO of an Indian auto-part manufacturer was beaten to death by a mob of workers who had recently been laid-off from a plant outside Delhi. Those kinds of violent events are distant memories in America's industrial history. CEOs of mammoth companies that hurt millions of people through fraud and deceit are rarely prosecuted and, when they are, generally receive a slap on the wrist and maybe a short sentence in a country-club white-collar prison. On Wall Street, there is little downside to enriching oneself at the expense of the larger population; one risks bad publicity, and maybe an uncomfortable Congressional hearing.

This is an issue -- de facto impunity for the worst corporate offenders -- that will also need to be addressed as we try to dig ourselves out of the mess in which we find ourselves today.

Tagged as: financial crisis

Joshua Holland is an editor and senior writer at AlterNet.