Friday, October 04, 2013

128.7 - Clown Award: AIG CEO Robert Benmosche

Clown Award: AIG CEO Robert Benmosche

Okay, now time for our other regular weekly feature, the Clown Award, given as always for meritorious stupidity.

Just quickly before I bestow the big red nose this week, I want to mention that I had a runner-up, a very close second, close enough to deserve a mention.

It was Guido Barilla, the chairman of Barilla Group, the pasta company. Barilla said last week his company will not feature any gay families in its advertisements because he likes the "traditional" family. If someone disagrees, well, they can go "eat another brand of pasta."

The anti-gay remarks generated pushback and Barilla quickly issued an apology which started with the usual non-apology of "I'm sorry if anyone was offended" and insisted "I do respect gay people and everybody's freedom of expression," and then, hilariously, said "I just wanted to underline the centrality of the woman's role in the family." Which not only means that he is apparently blissfully unaware of the fact that a same-sex couple can be two women as well as two men, but that instead of being a homophobe, he's just an old-fashioned sexist.

But getting to this week's dishonoree, the big red nose goes to the CEO of AIG, Robert Benmosche. AIG was the company whose insane investment strategy was to sell credit default swaps on mortgages to everyone - economically betting that housing prices would never, ever, go down - and whose collapse would thus bring down not only AIG but a whole bunch of other companies that depended on the value and stability of those swaps.

When Lehman Brothers went bankrupt the fall of 2008, AIG was about to go down as well. But the Federal Reserve stepped in with a huge bailout to keep the company afloat, its rubber raft pumped full of public - taxpayer - dollars. One hundred eighty-two billion public dollars, to be more exact.

So when in March 2009 AIG executives paid themselves $165 million in bonuses, including 73 upper muckety-mucks who got more than $1 million each, it caused a bit of a ruckus.

It was, according to Benmosche, unconscionable. Not the bonuses, the criticisms of the bonuses.

In fact, he literally - in the true sense of the word, literally - compared the criticisms of AIG executive paying themselves bonuses with public money after they drove their company into bankruptcy, literally compared the criticisms with lynchings of blacks in the old South.

He told the Wall Street Journal that the criticism
was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that - sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.
And sure, you can see the comparison, see how one is just like the other, of course you can. Better Markets, a public interest group, noted that AIG executives kept their "bonuses, mansions, boats, sports cars, club memberships, house help and everything else." And the blacks who were lynched got to keep ... well, they didn't get to keep anything, actually, not even their lives. But still you can see how one is just like the other - if you're a clown like Robert Benmosche.


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