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On the surface, it sounds like a healthy company was rewarding its best and brightest. Over 400 employees recently received bonuses. Three-fourths of the company received more than $100,000. Fifty-one employees received $1 to $2 million; fifteen received more that $2 million, and six received $4 million. The highest bonus stood at $6.4 million.

Bonuses.

That's on top of a salary we can assume is decent to begin with, given the size of the company. But, hey, this is capitalism. And you reward people for raising the bottom line, making stockholders richer, offering services — in this case, insurance — that betters the lives of your customers and society.

Except for the fact that these bonuses were handed out to executives of a company on the verge of collapse, one that has lost more money in three months — $62 billion in the last quarter alone — than most of us would see in three lifetimes. Bonuses given in a company whose financial troubles are not only inflicting pain and distress on millions of investors, but are also threatening to take down a significant portion of the economy.

I admit I don't comprehend exactly what the insurance behemoth AIG did to get itself and thus the rest of us in trouble. Something about "credit default swaps," what some are calling "exotic derivatives." No matter the explanation, everyone seems to agree: AIG executives made foolish decisions, and the company has no one to blame but itself for its collapse. As Edward M. Liddy, the government-appointed chairman and chief executive of AIG, put it, the company has made mistakes "on a scale few could have ever imagined possible." Who can understand it?

Like most people, I wince at rewarding incompetence. But I also get the idea that if AIG goes down, a lot of other companies go down like dominoes, and that many more innocent will suffer. So the idea of the government infusing the company with some cash (taxpayer money — our money essentially — and so far to the tune of about $200 billion), seemed justified.

And then we hear that some of that money, $165 million, has been used to pay out bonuses. This news, to put it mildly, doesn't sit well.

President Obama said it made him "angry." Comedian Stephen Colbert says he wanted to lead a pitchfork-wielding mob after the execs. Senator Chuck Grassley (R-IA) said the executives should fall on their swords. Representative Paul Hodes (D-NH) says the company's initials now stand for "arrogance, incompetence, and greed." Most of us are mad as Hades and aren't going to take it anymore. It's a scandal, a national folly, and we want our money back.

Those who read the news closely know these are not performance bonuses, but retention bonuses, incentives to keep talented people on board a sinking business. But the distinction is lost on most of us. We're still mad as Hades and aren't going to take it anymore. It's a scandal, a national folly, and we want our money back.

And that may be happening. As of yesterday, Liddy said he is asking every AIG exec who received a bonus of more than $100,000 to give at least half of it back.

So it seems that the scandal of the AIG bonuses may soon come to an end. While most American would sigh in relief, I think it will be a pity. The outrage at the incomprensible unfairness of it all seems most appropriate as we walk through the most reflective of church seasons.

We are in the middle of Lent, treading water in the muddy pool of self-examination. We see a lot of muck and mud as we look within. The harder we look, the darker things are. At the bottom of this bottomless pool, toward which we are rapidly sinking, lurks death. And dragging us down is nothing but our own arrogance, incompetence, and greed.

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March (Web-only) 2009, Vol. 53

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