Robert: I have to say, Paula, the public outcry over the ridiculous bonuses to AIG executives strikes me as long, long overdue. I think Americans have reacted to brutal business practices sort of the way some women react to abusive men: They can’t help it. It goes with the territory.

In my judgment, it has taken way too long for Americans to express some anger at the outsized salaries and bonuses of business executives at a time when worker salaries stagnated.

President Obama (God I love writing that) needs to figure out a way of constructively channeling that anger, without recklessly stoking it or dismissing it. Here’s my anger. This financial crisis has taught me that huge swaths of the American business community has been filled with complete and utter bullshitters who had not one clue about what they were doing. And yet because these folks were wealthy, Americans foolishly and self-destructively looked up to them, “respected” them. It’s time we end the presumption that people making tens of millions of dollars are doing something good or constructive. Some are. Some aren’t. We need to recalibrate our views of business.

What do you think?

 

  Paula: I felt the same fury you describe, but it was calmed somewhat after I read the piece by Andrew Ross Sorkin on the front page of the Times Business section today. He argues that 1) our entire society is based on the idea of honoring contracts. If we violate this trust we risk chaos; and 2) the so-called talent that is receiving these bonuses, as much as they are responsible for getting us into this mess, also may be the only ones capable of getting us out. If they leave AIG, we risk their going elsewhere and bringing down the company.

The idea that they could get other jobs may seem unlikely on the surface, but according to Sorkin, these financial types will always be able to find jobs. This may be a sorry indictment of what passes for necessary expertise these days, but this doesn’t prevent it from being true. Didn’t the US hire all these German scientists after WWII? I would also add that if the government controls the voiding of contracts, then it is as good as acknowledging that it has taken over AIG. Obviously, it doesn’t want to go there yet.

I don’t pretend to understand any of this, but I know enough to see that knee-jerk outrage is generally not a good way to frame policy. It’s interesting that when people get angry, the administration seems to respond — but should it buckle or rather try to explain what is involved. I have to say that I have a lurking distrust of Andrew Cuomo’s tendency to get on the populist bandwagon whenever there’s a dramatic issue that stokes public outrage. I’d like to see Obama give one of his measured speeches in which he explains the pros and cons on each side and then presents his decision for a course of action.

 

Robert: Yes, Obama needs to step forward, but there is something healthy about the anger, in my view, and he needs to channel it in the right direction. Anger properly focused can unleash a lot of energy and creativity. Someone needs to attack the self-absorbed, foolish financial folks with all the fury and anger that people have when they attack welfare recipients. These financial idiots (sorry, I need to call names to capture the anger) have brought the world to the brink of financial catastrophe and they still can show a little humility. Welfare recipients never brought the world to the brink of catastrophe.

 

Paula: I agree that anger can be constructive, but often it is not. I distrust it and prefer the rule of reason. But it’s an interesting question. Is anger good in the current situation? I hope some readers may respond.

 

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