AIG, Silas Marner, and a misdirected rage
George Eliot’s “Silas Marner: The Weaver of Raveloe” was published during the Industrial Revolution in England. It tells a tale of virtue, the rewards of hard work, and the inevitable and eventual punishment of evil against your neighbor.
Dunstan Cass is the selfish, deceitful, and corrupt villain in this classic story, and his family is the wealth and government of the city. When his spineless brother Godfrey gets drunk, Dunstan convinces Godfrey to give him money intended for rent. When Godfrey sobers, he demands payment from Dunstan in order to pay his own bills. Unable to return the squandered money, Dunstan convinces him to sell his horse to raise the necessary funds. After the horse is sold, but before it is delivered, Dunstan subsequently kills it during a hunt. Undiscovered in this atrocity, Dunstan burgles the title character’s home, steals his hard-earned fortune, and seemingly gets away with it (he is found dead at the bottom of a well sixteen years later along with the gold he stole).
Today, President Obama, congress, and the populace publicly cast their outrage at AIG, the multinational insurance corporation of whom the government owns eighty percent. Newswires, bloggers, and commentators went berserk at the revelation of AIG’s disbursement of bonuses to executives, which totaled nearly $165 million. Employees received threats from private citizens and the company had to post armed guards at their headquarters to keep peace. Republican Senator Chuck Grassley even expressed his desire that AIG executives “resign or go commit suicide.” President Obama asked, “How do they justify this outrage to the taxpayers who are keeping the company afloat?”
How could this company, to whom the government—and by that logic, taxpayers—has given over $173 billion in “bailout,” “stimulus,” and “re-bailout” funds? Clearly, legislators and the public have found their Dunstan Cass.
But is this outrage properly directed? Has AIG been justly maligned as the archetype of corporate corruption, or should the accusers be more introspective before casting stones?
The bonuses the executives at AIG received were no secret. They were planned a year ago, and were never intended to surprise anyone. The CEO of AIG even contemplated not issuing these bonuses, but it was determined they were legally bound to do so. Had they not fulfilled their obligation, the jilted beneficiaries could have sued, and the company would have had to pay them anyway, along with legal fees and punitive damages.
When the government became a majority shareholder in the company, it was their responsibility to account for future expenditures and, if necessary, take legal action to adjust or rectify those expenditures. When it was revealed that AIG intended to contractually fulfill their obligations, lawmakers immediately played ignorant and screamed, “How dare they!?” But what the government should have been asking was, “Why did we let this happen? How dare we?” Instead, of course, they cast blame in order to deflect responsibility.
This is cause for a federal self-flagellation by itself, but Obama and Congress should also look at their previous actions to gain a proper perspective. Consider the most recent omnibus bill and “stimulus” package, and the earmarks—also read as bonuses to congressional districts—they contained. Obama’s $410 billion omnibus spending bill contained approximately $7.7 billion in pork-barrel monies, or about 1.88 percent of the total cost. The earmarks in the stimulus package—while hard to decisively pin down—totaled just under $15 billion by a conservative estimate, or 1.89 percent of the total price tag of $787 billion.
By contrast, the AIG bonuses that have Washington and Main Street infuriated are approximately 0.09 percent of the total dole they have received. Each government-approved spending bill has nearly twenty times the amount, per capita, of bonus bacon. I suppose we shouldn’t expect this administration or congress to express outrage at themselves, but we citizens should be just as angry, if not angrier, at our government for their heinous spending practices as we are at AIG.
If AIG is Eliot’s Dunstan Cass, “the spiteful jeering fellow, who seems to enjoy his drink the more when other people go dry,” in our contemporary tale of retribution, then surely the government is Godfrey, and we are Silas Marner. Godfrey enabled Dunstan’s greed by foolishly lending him money while in a drunken state; he lost his horse to Dunstan by failing to properly secure his transaction. Silas failed to secure his house and fortune and left his door open to whomever would come and take it. In the end of Eliot’s novel, justice was finally served to favor Silas; but the difference in her tale and ours is that Godfrey, who foolishly continued to lend money—the government—acknowledged his fault and plead the mercy and forgiveness of the weaver.