Rhymes with Scritti Politti, the British pop sensation almost as disgraceful as AIG. Forgive my skepticism, but we’ve down this road before. Last time, it was AIG executives supposedly taking money baths at high-end California spas. Populist outrage reigned; sanctimonious politicians thundered. Problem was, they weren’t AIG execs, they were agents in Cali as part of the incentives packages built into their compensation plans. Media outlets dutifully reported the misinformation, with Anderson Cooper repeating that it was a retreat for executives even though the very piece he was introducing debunked the charge. Sounds crazy; if you want to sell product, it’s wise to motivate and incentivize the people actually selling the product. Part of the trip itinerary included presentations on AIG product. So … you have a captive audience of top company agents in a conference room for three days to highlight the benefits the company’s products provide. What, exactly, is the problem?
Fast forward to today, and once again, the story we’re getting ain’t exactly truth. What did Geithner know and when did he know it (time to go, Tiny Tim)? Ditto for Chris Dodd (will this finally be the nail in his political coffin?). Some on Capital Hill have allegedly known about the bonuses for a year. It isn’t smart, but you can understand the thinking. If you’re asking people to put their fingerprints on the AIG kryptonite, they might require something in return. I’m not defending AIG or how any of this was handled, but after the shellacking AIG CEO Ed Liddy took in front of Congressional cameras (from the very people who put him in charge and approved the bonuses), I’d argue much of the anger and outrage should be directed at the other side of the table. The media misreports, the politicians play us for fools. All the while our boomer clients get further and further away from the recovery they so desperately need.