You guys aren’t going to like this, but you know who I feel sorry for? Edward Liddy. That’s right. He’s the guy the government appointed to run AIG after Hank Greenberg and his gang set it up to crash and burn. Today Greenberg popped up on television like a vicious Mini-Me to pile on the dead bunny.
Greenberg left in a scandal in 2005 after setting up the business unit that got AIG into all of its trouble. You know that operation. The Financial Products group that came up with all those cute derivatives backed with now-toxic instruments. And here he is this morning, jabbering away like a wise elder statesman. Pfui.
This was only slightly worse than the drubbing that Mr. Liddy took at the hands of the suddenly irate congressmen in Washington on Wednesday. Many of our senior legislators had good points to make, no question about it. The situation is dire, and certainly subject to Federal review, as it was years ago when the SEC was supposed to be regulating the industry. Most of the politicians acquitted themselves well. But at times the hectoring got out of hand, to the point where you might have thought, if you were a cynical type of person, that these members of Congress were trying to come up with the quintessential sound bite that would land them on the evening news. Sure enough, at the end of the day, it was the showboat from Massachusetts whose “have you no shame!” diatribe did get the most airtime. I guess he knows his business, too.
Of course, Edward Liddy isn’t blameless. He obviously made some very bad decisions. But he is only the last in a series of managers – both at AIG and elsewhere – who has done so. It’s pretty evident noxious stuff has been going on everywhere for years. The culture of compensation of which he was a part is so deeply ingrained in corporate culture now that even Tim Geithner, the guy who is supposed to oversee the bailouts, didn’t pop up a huge red flag when he first heard about AIG’s contractual obligations to its disgraced lunkheads.
Worst of all, for the poor doofus on the stand, is the thought that you’ve got to know is running through his head as everybody is saying nasty things about his mother: “I’m doing all this for one dollar a year.”
Man. I would do it for less than five. As long as it came with a guaranteed bonus.