Thursday, March 19, 2009


The AIG scandal, and I do see it as a scandal, seems to be the latest preoccupation with Congress. Yes, I'm outraged as the onion gets peeled back to find the legislative culprits that contributed to it, and am compelled to comment.

First, the scandal exists at a value of $165M, of a total amount pledged to AIG of about $300B, or roughly 0.05%. This is in the face of total TARP funding that appears to be pushing the $2T threshold, or a total fraction for AIG of about 15%. In other words, except for the obvious outrage, it almost seems petty.

Second, I started thinking about the word 'bonus'. From, it is derived from the Latin word for 'good'. Think 'bon bon', or simply 'bon'. Think of a bonus as a kind of tip...a reward for good performance, such as you would give a waitress for bringing the cream with your coffee without being asked, or bringing the check after a quiet nod across the room.

I work for a relatively conservative manufacturing company. Bonuses are typically reserved for those at the director level and above, to include vice presidents and division presidents, and corporate bigwigs. Sometimes they deign to give bonuses to lower level employees, but never as a matter of course, and rarely to the level that they receive them for themselves...that is to say, a serious fraction of their already serious paychecks. Really...don't you consider 50 to 75% of $175K truly excellent coin? But I also don't begrudge them for their wisdom, experience, and hard work that got them to a position of real responsibility, ensuring that the workforce is motivated, focused, and coordinated to deliver product on time and with good quality, often at great sacrifice to their personal lives.

Even then, the amount they receive is a mere drop in the bucket compared to the offerings of the financial institutions: enough money to cause me to think about quitting work and retiring very comfortably on just that one check. The numbers proffered in the AIG case approach this level, so I have to ask exactly what qualifies one for a bonus, and how is the amount determined?

For instance, if I gave my broker $1000 to invest, and after a year he returned $900, losing me money, I'd suggest he didn't really earn a bonus. What if he returned $1100? I consider that to be slightly above expectations, but that's what I pay him for. $1500? That would be extraordinary, and I'd be thinking about offering some kind of tip, or bonus...perhaps 10% of the amount over my expectation.

AIG is stating that the bonuses were offered as part of an employment contract, apparently without any obvious performance goals, with results that have brought the world economy to its knees and possibe ruin. I don't understand. Worse, it's stated that unless AIG is bailed out, things will be worse. In other words, they are blackmailing us to bail them out.

In its simplest terms, this is the equivalent of getting paid for showing up, with no accountability for the poor decisions and the high risks that they took with our money. It's the equivalent of giving A's for effort in class, or trophies and certificates for kid's sports teams for 'participation'. It's the price we're being asked to pay for the dumbing down of everything, where character counts for more than accomplishment...except here I don't see any character worth rewarding.

Wednesday, March 4, 2009


Thomas Friedman, again. See

I've been a bit busy lately...too busy to keep up with the most of my news gathering is via Google news several times a day. But the pile of old papers grows, and I try to catch up at breakfast and lunch...finally reading Thomas Friedman's post from two weeks ago.

He begins this missive by stating that there are 9 bodies laying unclaimed in the Mumbai morgue since last November...the bodies of 9 sub-humans who indiscriminately murdered 300 innocents because they didn't subscribe to a medieval world view of misogyny, oppression, torture, and death, while we celebrated our Thanksgiving holiday. Friedman states that this is a good thing, and while I agree with him on that point, I think he misses a broader disappointment.

At this writing, we are 7 and a half years from the horror of 9/11, and since 1982, the world has experienced over 30,000 acts of terrorism in the name of islam. The 9 bodies remain unclaimed because the muslim populace of India, the second largest in the world, rejects the claim that they are martyrs, and undeserving of a proper burial. Friedman says this is good because, finally, moderate islam (if there is such a thing) is standing up in at least one way to say that enough is enough.

We could reach back to the slaughter at the 1972 Olympics, an event conducted to unify the world, but let's just call it 27 years of barbarism, and FINALLY one muslim community has reached the consensus that they will take but one small stand, that the perpetrators of atrocity are not entitled to ritual burial. Yes, it's time. Yes, it's a good thing. But I remain disappointed: we've been waiting too long, and the gesture is too small.

Tuesday, March 3, 2009

Health Insurance Revisited

There seems to be this idea that people without health insurance don't get (or can't afford) medical treatment. Simply put, if I think I will only need, say, $6000 worth of medical coverage for a given year (an estimate of the national per capita cost for doctors, hospitals, and meds), why should I buy a policy costing $6000 (or more likely, from a private insurer, more)? Why not just take that money and put it in the bank, so if, say, I need LESS than $6000 worth of medical treatment, I can pocket the difference. It's MY money, not the insurance company's.

What if I need more? Well, that's why you buy health cover the cost of potentially catastrophic illness. If you snooze, you lose...but more to the point, the average per capita cost of medical treatment is probably less than $6000.

What if I can't AFFORD a $6000 policy or the cost of my coverage? Well, that would be called WELFARE...relying on the good will of others to pay for that which you can't afford.

But the idea that lack of health insurance is somehow keeping people from getting medical treatment is false. You can choose how you spend your money...take your chances, or perhaps die...or beg from others.

t the end of the day, the SAME PEOPLE will be begging or borrowing from others. Having or not having health insurance isn't the issue. The issue is having the education to earn a salary that will allow you to either buy insurance or pay for coverage.

Demanding anything else is now somehow dipping into MY pocket...and it looks like I just don't have a say.