*Two disperate thoughts that do not qualify for blogs in themselves, combined into one!
The A.I.G. bonus scandal represented a twinfold challenge for America, and we are failing the test.
As a quick recap, A.I.G. is an insurance giant that invested heavily in securitized tranches of subprime mortgages that have recently become toxic. Because of newish mark-to-market accounting rules, A.I.G. was forced to either mark down or write off assets that quickly become illiquid. Because A.I.G. was deemed 'too big to fail' by the government, public money was injected directly into A.I.G. so that its balance sheet would not make it insolvent. Despite posting the largest quarterly loss in American corporate history, and despite since receiving over $170 billion in capital from Uncle Sam, A.I.G. still paid out $165 million in bonuses for executives and independent agents in its financial services division.
This, naturally, has caused a populist outrage. With the nation in recession and A.I.G. as a whole, uh, stuggling, it may have been prudent for those receiving bonuses to have politely declined. But that is not exactly the rational thing to do, nor are they legally obligated to do so. For you see, these bonuses were written into their contracts based on their individual performance and nothing in the subsequent bailout packages made payment of these bonuses a condition of not receiving public money.
Blame whoever you want, but somebody screwed the pooch on this one and we will have to pay. It might be onerous, and we might have to hold our noses while doing it, but we have no other (moral) choice. Our response to this fact, in both the civic and political realm, will determine the makeup of our national character.
First is the sanctity of private contract law, pretty much the basis of a functional legal and market-oriented system. Though A.I.G. is now a publicly owned company, the contracts guaranteeing the bonuses were signed while it was a privately-owned going concern. If the government retroactively negates the bonus, it will increase the transaction cost of every business venture in the future as companies and businesspeople will have to insure against the possible negation of agreements. Moreover, by my way of thinking, it is super-unconstitutional.
Congress cannot pass bills of attainder, aimed against individuals, and it cannot pass laws ex posto facto - making what was once legal illegal after the fact. (Perhaps the Supreme Court will allow Congress to pass ex posto facto bills of attainder, but I hope not.) Punishing the miniscule number of people, "employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money", seems dangerously close to a bill of attainder. Moreover, proposing a retroactive 90% tax of legally acquired income before the tax was passed is confiscatory and after the fact. Regardless of the Constitutionality of this bill, its overall effect will be to weaken the rule of law and the social contract.
Through use of private economic decisions, the 2010 and subsequent elections, and social interactions there are numerous methods that are civically healthier than relying on government action now. It would be okay, if somewhat misguided, to socially shun the people receiving this money. It would be better to pressure them to donate the money or somehow use the funds to charitably contribute to either their company or larger society. They are not The Enemy, and they for damn sure should not be receiving death threats or be the victims of vandalism.
I mean, damn, are we China or what?! We ought to be better than this!
We need to use this as a "teachable experience." The excesses of the recent years should teach companies to structure better contracts which provide for maluses (bonuses that can be clawed back legally) or that are spread out over time to allow for long-term performance reviews. It should also teach government officials to use greater scrutiny when negotiating future bailout packages. Contracts are a good thing. Without them, there is only the force of law.
==
Numerology is stupid, and if you believe in numerology you are stupid too.
Now I understand that proper mathematics is a language of a kind. And I understand that code can be used to translate between words and numbers, and that Hebrew is a mathematical language. All of these things are beyond reproach. But if you believe numbers, in and of themselves, have the power to interpret anything then you "will be taunted and booed until my throat is sore". I mention this because MySpace keeps playing trailers from that stupid Nicolas Case vehicle, which I am sure is much different from that stupid Jim Carrey vehicle.
Numerology is stupid, and this I will prove. Take the fourth most important event in the history of the world, the 9/11 attacks. What number represents that event? 9 + 1 + 1 = 12 or 9 + 11 = 20, or if we include the year, 9 + 1 + 1 + 2 + 0 + 0 +1 = 14 or 9 + 11 + 2 + 0 + 0 + 1 = 23. Agh! There's that number again! 23! The number of Jordan! Or 9 + 11 + 01 = 21 or 9 + 11 + 2001 = 2021. Or if you take when the event occured in the Islamic calendar, or the Ethiopian one, or the Julian one, or the Kurdish one, or the Jewish one! The combinations are virtually endless. Because digits have no inherent value of their own beyond symbolizing quantity and time, you can manipulate figures all you want until to get something to fit into your predetermined 'matrix'. If you want to know the true power of numbers, become a true mathematician and stop supporting crappy movies.