We also learned this morning that AIG had planned an event at the $400 a night Ritz-Carlton in Half Moon Bay in California. And that event was scheduled to take place after we had just handed them a pile of money AND they asked for another $37.8 billion loan. What is even more appalling is that AIG had already spent about $444K on some other event. An AIG representative claimed that this Half Moon Bay event was a key meeting, an annual event for 50 AIG employees. Can you say "junket"? Can you say "boondoggle"?
Sen. Max Baucus, chairman of the Senate's Finance Committee, understandably went ballistic. He sent a letter to Federal Reserve Chairman Ben Bernanke "demanding to know what powers the Fed has to fire AIG staff, limit executive compensation and assess the activities of AIG's senior management. Baucus also asked Bernanke for names of Fed employees who authorized or knew about the retreat, and what the Fed is doing to recoup any unauthorized expenditures." Awesome.
But such behavior does not bode well for the country. Not surprisingly, there was another ripple effect because of AIG's actions--the company's stock plummeted to a record loss. Who in the world--and I do mean world--should ever trust AIG again? Not the taxpayers and certainly not investors. AIG's leadership has demonstrated it is completely cavalier about its fiduciary responsibility and callous about the well-being of the American taxpayers who would have made that so-called key meeting possible. On the other hand, some really shrewd business person could be in a position to make quite an impressive move by taking over AIG.
Another company recently in the news for other reasons, Wachovia, has called off an all-expenses paid cruise to the Greek Isles for 75 A.G. Edwards brokers and their spouses or significant others. A Wachovia spokesperson claimed the trip was a way to recognize its top financial advisors. Hold on here a moment. Top financial advisors?? Seriously? And Wachovia is to have its bad debt purchased by the federal government, that is us, of course, that taxpayers? Seriously?
Clearly the financial wizards of this country were planning to operate business-as-usual with taxpayer money. They aren't repentant. They aren't troubled by their excess and lousy decision-making. They have no remorse about keeping ridiculous bonuses for running a company into the ground.
Looking at a list of stories on Yahoo!, I see these story titles:
- Jobless claims drop from 7-year high
- Retirement accounts have lost $2 trillion
- Payrolls drop by most in 5 years
- Factory orders drop by 4 percent in August
And, on top of that, Iceland may have to declare bankruptcy.
Though I still think we are in the middle of some financial forest fire, no doubt it is dangerous and difficult and lots of people are getting hurt. What I think the taxpayer's need to see if some financial responsibility on the part of those clowns on Wall Street and those in big executive offices with their ginormous golden parachutes. We need some remorse, we need to see some significant change of behavior, we need to see some change of practice, and we need to see some self-regulation.
Now that I think of it, I wouldn't mind seeing that kind of response and behavior in members of Congress. Instead of pointing fingers, it would be nice if the politicians and the business executives would actually do something constructive and behave responsibly. Talk about wishful thinking.