Financial Executives Victims of Lynch Mob


There aren’t enough faces, palms, heads or desks to handle this statement from AIG CEO Bob Benmosche. After taxpayers had to spend $85 billion to keep his company from bankruptcy, people were understandably upset when they then paid out $165 million in executive bonuses before paying back that money. Benmosche says that was a lynch mob just like blacks faced in the south:

“Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] … They understand the derivatives very well; they understand the complexity. … They’re all scared. They [had made] good livings. They probably lived beyond their means. …They aren’t going to stay there for nothing.

The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.

“We wouldn’t be here today had they not stayed and accepted … dramatically reduced pay. … They really contributed an enormous amount [to AIG’s survival] and proved to the world they are good people. It is a shame we put them through that.”

First they came for the investment bankers, but I said nothing, for I was not an investment banker. Then they came for the hedge fund managers…of course, they came for them in a stretch limousine.

Comments

  1. Who Knows? says

    They probably lived beyond their means. …

    Isn’t this one of the criticisms that was being leveled against mortgagers that were being, falsely, blamed for causing the financial crisis?

  2. kantalope says

    Sure lynching victims were always using public money to chat up the white womens, that was why there was such outrage.

    From the shameless division:

    Benmosche, 68, is eligible in 2013 for $13 million, including an annual bonus of $4 million and multiyear incentive pay of $7 million, on top of a cash salary of $2 million, according to a regulatory filing yesterday. He received $10.5 million in 2012, with $3 million in cash and $7.5 million in stock, and neither amount was tied to AIG’s performance.

  3. janiceclanfield says

    It’s discouraging that these bastards will never really have to pay the price for the grief and misery they caused.

  4. kantalope says

    And I have to agree with richardelguru – I was hoping for some real pitchfork on wallstreet- tookus action.

  5. Erk12 says

    They [had made] good livings. They probably lived beyond their means

    He really thinks this is a point in their favour? Public money should be given to executives who fucked up their company by making risky “investments”, because they don’t know how to even manage their personal finances? Or better yet, if they weren’t at the company at the time of the crash, they went into a company receiving public assistance, expecting to get payed bonuses and lived beyond their means.

  6. Chiroptera says

    They probably lived beyond their means.

    But remember, kids, if SNAP isn’t enough to help you get buy, then you are also “living beyond your means,” but in your case thats a character flaw that you need to fix.

  7. says

    Look, it’s not their fault that another division of the company broke the whole company. If anything, since the public purse is the only reason they still have jobs, they should get bigger bonuses, simply in gratitude for them not needing even more public money.

    And wasn’t Stretch Limousine a French Country & Western singer?

  8. raven says

    This is why Libertarianism fails.

    Humans cheat whenever they can. Not all humans. Probably not even most humans. In fact, sociopaths only make up 1% of the population.

    But it doesn’t take many like AIG Bob Benmosche to destroy the system.

    Probably this guy leans Libertarian, thinks food stamp recipients are moochers, and that Romney and Bush were hopelessly liberal.

    Much of Wall Street consists of people spending all their time trying to game the system and get around the rules. And no matter how many rules and regulations there are, they always invent new ways around them. And why shouldn’t they? It’s get ultra rich quick most of the time they are playing with Other People’s Money, and no one ever goes to jail, no matter what they do.

  9. says

    Ed:

    I have to concur with other commenters. I HATE inaccurate headers. I want this one to be true–and I’m not talking about changing the way it’s been written.

  10. says

    I think we should execute the 50 richest people in the country (which country? Any country!)

    I suggest this, not so much to get rid of the swine, as to see all the effort they would put into being the 51st richest person.

  11. zero6ix says

    Dramatically reduced pay? Oh, sorry you had to settle for a yacht with silver slating, as opposed to platinum. It must be so hard to be these guys, having to scrape and scrounge to pay their house keepers. Why, I hear one of them had to let Rosa and Alma go, so they could afford a new helicopter to show off. Tough times all around.

  12. raven says

    And no matter how many rules and regulations there are, they always invent new ways around them.

    and

    Is that even possible?

    Sure but they are designed to be as confusing and opaque as possible.

    Derivatives were designed to get around all the in place rules and regualtions. They are off exchange, unregulated, confusing, and not public. And they made a lot of people very rich while ultimately failing.

    In other words, they worked perfectly for their intended purpose.

  13. peaches says

    Delurking to vigorously agree with exdrone and raven. Derivatives were designed to be as confusing as possible so he’s full of shit when he says “they understand the derivatives very well.” Almost no one understood them well, they didn’t care to as long as the money kept rolling in. If they understood what they were doing they would have seen that the returns couldn’t last forever.

  14. Chiroptera says

    Now you have these bright young people [in the financial-products unit] who had nothing to do with [the bad bets that hurt the company.] …

    “I don’t understand why people think I’m evil for working for an organized crime syndicate. I’m just the accountant; I’m not the one who breaks people’s knee caps or bribes politicians.”

  15. doublereed says

    I’d be much happier if they compared themselves the guillotine executions of the French Revolution.

  16. Glenn E Ross says

    I am actually grateful to Mr. Benmosche. I had a break through in therapy this week because of him. I read the blogs on my phone while I am waiting to see my therapist and read his comment. One of the things I have been struggling with is the belief that I am a narcissist. I read Mr. Benmosche’s comment to my therapist and told her that I have determined I may be a self centered asshole, but I could never compete with a true narcissist like Mr. Benmosche. She agreed and was pleased with my progress.

  17. caseloweraz says

    The entire (edited) WSJ interview is worth reading (as are the comments, in a different way.)

    Apparently some employees and their children did suffer stalking and misguided verbal abuse. But that hardly justifies the comparison to lynchings. And did you notice this: The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that–sort of like what we did in the Deep South…” (Emphasis added.) Is that the royal “we”, “we the nation”, or a confession that Benmosche was part of a lynch mob? (Not a serious question; it just strikes me as clumsily phrased.)

    But this is serious. Benmosche says everybody was a villain; he doesn’t seem to really understand what happened. Or he does but is in denial.

    Robert Benmosche: “We’re trying to find the villains [for the financial crisis]. There’s got to be a villain somewhere. The problem is that there isn’t a villain. There are villains. And they are everybody. They are the speculators in real estate. The people who flipped houses. People who lied and cheated [on mortgage applications]. Nobody did the income appraisals. … I include myself in there. I knew stuff was wrong” in the mortgage-underwriting system years before the real-estate bubble burst.

    He knew stuff was wrong. And so he did… What?

  18. colnago80 says

    To be fair (as hard as that may seem for an asshole like him), he was not responsible for AIG going belly up as he didn’t join the firm until after it happened.

  19. Baktru says

    Raven said:


    Derivatives were designed to get around all the in place rules and regualtions[sic].

    No. Wrong. Not true. Derivatives were designed for a number of reasons but that wasn’t it.

    There are in fact good reasons for the existence of both stock based and commodity based derivatives. They are essentially about trading risk. The problem was never the existence of them, they are in fact a good thing. If ia am for instance a soy bean farmer, and I can use derivatives today to lock in today’s decent price for soy for my harvest half a year from now, is that bad? No. Not in the least.

    Saying “Derivatives are bad” is like saying “GMO’s are bad” because some firm named Monsanto has some nasty business practices around them.

  20. raven says

    Saying “Derivatives are bad” is like saying “GMO’s are bad” because some firm named Monsanto has some nasty business practices around them.

    What bullcrap.

    Saying derivatives are bad is like saying they could implode all of Wall Street, most of the western world, take down hundreds of banks, and help cause a Great Recression.

    Which is exactly what they did.

    Yeah, I know. Derivatives don’t kill economies. Which is really irrelevant. People and companies like AIG and Bob Benmosche with derivatives kill economies.

  21. felidae says

    In the WSJ today–Disneyland having to change its policy about disabled children and thier families being allowed to go to the front of lines because people were hiring disabled children to accompany them or faking disabilities to game the system, shows the cynicism of a segment of our society. I wonder where they learned that? And poor old Hank Greenberg (former CEO of AIG), down to his last $100 million, suing the government because he thinks he was unfairly treated during the bailout. I hav to agree with George Carlin–our country is circling the drain

  22. kantalope says

    I didn’t flip houses. I didn’t borrow money without filling out paperwork and yet there are no jobs…still. I didn’t get a million dollar bonus either. I’m pretty sure everyone isn’t to blame. Maybe everyone Benmosche knows was a bad guy in this but I think that says more about the psychopaths in his social circle than the reality of what happened.

  23. slavdude says

    Raven @25:

    Yeah, I know. Derivatives don’t kill economies. Which is really irrelevant. People and companies like AIG and Bob Benmosche with derivatives kill economies.

    The only thing stopping a bad guy with derivatives is a good guy with derivatives.

  24. laurentweppe says

    Is that the royal “we”, “we the nation”, or a confession that Benmosche was part of a lynch mob? (Not a serious question; it just strikes me as clumsily phrased.)

    Neither: it’s a collective We, as in “We the upper-class”

    ***

    But Benmosche interview is actually quite revealing: the upper-class is more than terrified by the idea that the plebs might want to lynch them: many among the upper-class are actually convinced that the plebs already want to commit a class-based genocide and that lack of fire-power is the only thing stopping them for now…

    This is the great irony of the situation: you may think that the upper-class deserve to fall from its lofty position of hereditary privilege and if you express such sentiment, you will -courtesy of the the rich heirs’s political and mediatic bannermen- be called a demagogue, a bolshevik, a fascist instrumentalizing the anger of the people to establish your own dictatorship; but at the same time, many among the de facto nobility of the western hemishpere perceive themselves as so depraved and abusive that they can’t imagine the hoi polloi wanting anything less than their extermination.

    Which actually explains why the right is becoming increasingly unfettered on both sides of the pond: they can’t live without the commoners, because they still need people to do the menial jobs necessary to keep the civilization they feed off functionning, but convinced that the plebs thirst for their blood, they reach what is to them the only logical solution “We have to make them fear us more than they hate us“, and if that means giving power to far-right thugs and unleashing them on the populace, then so be it.

  25. says

    “and if that means giving power to far-right thugs and unleashing them on the populace, then so be it.”

    And that always works, at least until it stops working–then it gets dicey for the rich because they HIDE in their mansions.

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