All Suffering Is Not Equal

In General Interest by Jonathan Tasini0 Comments

   To understand how out of touch some of the people at the helm of large businesses are, consider the following contrast today. First, the nation’s ranks of unemployed–which have been swelled by the irresponsible behavior of, if I may quote the president, "fat-cat bankers"–are in dire straights:

More than half of the nation’s unemployed workers have borrowed money from friends or relatives since losing their jobs. An equal number have cut back on doctor visits or medical treatments because they are out of work.

“I lost my job in March, and from there on, everything went downhill,” said Vicky Newton, 38, of Mount Pleasant, Mich., a single mother who had been a customer-service representative in an insurance agency.

“After struggling and struggling and not being able to pay my house payments or my other bills, I finally sucked up my pride,” she said in an interview after the poll was conducted. “I got food stamps just to help feed my daughter.”

Over the summer, she abandoned her home in Flint, Mich., after she started receiving foreclosure notices. She now lives 90 minutes away, in a rental house owned by her father.

With unemployment driving foreclosures nationwide, a quarter of those polled said they had either lost their home or been threatened with foreclosure or eviction for not paying their mortgage or rent. About a quarter, like Ms. Newton, have received food stamps. More than half said they had cut back on both luxuries and necessities in their spending. Seven in 10 rated their family’s financial situation as fairly bad or very bad. [emphasis added]

   If ever there was a need for the government to come to the help of the people, this is the time. The most pressing need is to make sure that the people do not face years and years of economic despair, which would leave a mark on our country for decades.

   In the other, Alice-in-Wonderland, world of AIG:

Top American International Group employees continue to struggle financially, having taken big personal losses after the near collapse of the giant insurer last year, said its chief executive, Robert Benmosche.

Mr. Benmosche said 10 individuals who report directly to him have lost a combined $168 million in prior years’ pay since the U.S. bailout of AIG in September 2008. Another five employees at AIG’s financial-products division, who are unwinding its derivative trades, have lost $88 million in prior pay.

The executives lost that money when their cash bonuses were cut and unvested stock salary and stock options they previously earned were rendered almost worthless after AIG’s near failure. "Many people think there was no penalty for the executives at AIG when it did poorly and that they need longer-term compensation so they don’t benefit from taking inordinate amounts of risk," Mr. Benmosche said.

Mr. Benmosche said his biggest challenge in recent negotiations with U.S. pay czar Kenneth Feinberg was about "getting sufficient cash to these people, who are starting from scratch in many ways."

Last Friday, Mr. Feinberg announced 2009 pay for top employees at AIG and three other companies that have received large amounts of government aid. The pay czar limited salaries for roughly 75 individuals at each firm to $500,000 and said cash compensation should not exceed 45% of their total pay. He also determined that at least half of each employee’s compensation must be held for three years, in stock or some other long-term instrument. [emphasis added]

   So, let me understand this: we are supposed to be concerned about AIG executives "getting by" on half-a-million dollars a year, while the Americans they effectively helped put out of work are on food stamps? It is hard to shed a tear for people who still have their jobs–and, arguably, some who should face criminal and/or civil sanctions for their actions–and are making in a year what most people could barely cobble together for their 401ks…which are now worthless thanks to the "fat-cat bankers".

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