11 November 2009

Wich Fat Guy Stamps His Wittle Foot

Today's report that Benmosche, the current and third CEO of AIG in the past twelve months is having another hissy fit: he can't pay his star performers what he says they deserve. Boo Hoo.

Let's be straight about this situation; it was the so-called "innovation" of these knuckleheads that has put not only the US economy, but that of the entire planet in peril. It is a Good Thing if reducing, and dis-incentivizing, such behaviour becomes the order of the day. That Benmosche must be the implementer of this Tough Love is just too bad for him.

He's getting about $10 million for this, by the way. Making money manipulation less lucrative is a Good Thing. Doing so makes real, productive use of capital and labor more attractive, and that is a Good Thing. Recall the tale of the Yenta, recounted previously in this endeavor: financial services is a zero-sum game, with the companies that do this merely extracting their profit from the money stream betwixt Savers and Borrowers. That this activity should be low tech, low pay, low innovation is a Good Thing.

It ought not to be the case that merely moving money from one hand to the other be the highest paid labor in the economy. When that happens, as I have described from history in this endeavor, chaos ensues. We do not need that. Benmosche should either shut up, and do what he's told, or get the hell out. He does, after all, not provide much added value.

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