Sunday, March 15, 2009

"The best and the brightest"

AIG has gotten more than $170 billion in bailout money from the Treasury and the Federal Reserve. And now AIG has paid about $165 million in bonuses to the executives who brought the company to its knees.

A more politically foolish use of 0.1 percent of available cash can scarcely be imagined.

AIG chairman Edward G. Liddy's defense of these bonuses may be even more outlandish:
Edward LiddyWe cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.
Raw intelligence is vastly overrated; elite educational credentials, even more so. But eclipsing these exercises in overpaying is the longstanding assumption that the very best talent in our society responds, in strictly Pavlovian fashion, to overwhelming sums of cash.

And even if you disagree with everything I've written so far, surely you would endorse this recommendation: It is time to retire the phrase, the best and the brightest, in all senses except the ironic, even sarcastic, sense in which that phrase was originally intended.

The Best and the Brightest was the title of a 1972 exposé by David Halberstam of foreign policy miscalculations by the Kennedy and Johnson administrations. For much of the next two decades, American geopolitics, crafted by none less than "the best and the brightest," wreaked havoc throughout Indochina:

VietCong execution
Napalm in Vietnam
Killing fields
It will take years, decades, perhaps lifetimes to shake American business culture of the fallacy that outrageous salaries are what valuable talent truly demands and deserves. In the meanwhile, I'll settle for a split second of humility regarding the true origins of the best and the brightest.


Jennifer Martin said...

Agreed. Liddy's comment is quite misplaced. Right now, even bankers want stable employment. It is the stable employment in uncertain times that is more likely to gain AIG employee loyalty. Additionally, Liddy's inference that government restrictions on compensation can only be described as arbitrary is also misleading, as in the case of AIG, there is plenty of good reason for government oversight. With all the banking talent that has been laid-off of late, I would hope that AIG could find more talent if the company stabalizes.

Anonymous said...

The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.

Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.

The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See:

Anonymous said...

There is nothing more revolting than seeing the state of the world under the best and brightest minds, in theory, with education fit for kings - than to see that talent and skill used to perpetuate a world of violence, greed, and conflict.

One would think that human compassion and morality would demand more of any meritocracy.