Tuesday, March 24, 2009

Where's MY Million-Dollar Bonus?

The shrieking and righteous indignation over the AIG bonus payouts have been echoing far and wide across this great land of ours, and not without good reason. Apparently AIG rattles its metal cup and begs for taxpayer money with one hand, and shells out $160 million dollars in "retention bonuses" with the other. Ostensibly intended to retain top talent at whatever it is they do, these bonuses had the curious (and not exactly unexpected) effect of paying a ridiculous sum of money to people who were responsible for nearly running the company into the ground. Only in America can you be compensated with an obscene amount of money for being a completely incompetent f**k-up.

So I started thinking, how can something this absurd happen? I mean, you can't make stuff like this up. What kind of bizarro universe would you have to live in if the stupidest idiots get paid the most for screwing up the worst? Eventually I came to the realization that our system of capitalism is at its very core responsible for the Alice-in-Wonderland economics we have been witnessing of late. Capitalism happens to be the best economic system the world has come up with yet, but it has some very glaring and major pitfalls. It all revolves around the free market system; that is, if you perform a task or manufacture something, what you earn depends on what the market is willing to pay you. In the majority of instances this paradigm is pretty reliable, but it does engender some ridiculous, nonsensical and grossly injust situations. For instance, why do school teachers get paid so little, but a no-talent cipher like Kevin Federline, the ex-Mr. Britney Spears, gets paid $10,000 just for showing his miserable mug at some big party somewhere. Why is it that policemen and policewomen, who put their lives on the line for total strangers each and every day, get paid so meagerly while baseball player Alex Rodriguez signs a contract for a quarter-billion dollars for playing a game part of the year?

So again, how do things like this happen? Because our economic system is filtered through the prism of our popular culture, which for some unknown reason values the contributions of Michael Jordan or Tiger Woods much more highly than those of teachers, nurses, or cops. In fact, Woods and Jordan get paid astronomical sums of money because they CAN! The capitalism system allows that to happen. You would never see something like that happening in Communist Cuba. Capitalism is about the only economic system ever created which would allow, and in fact encourage, contributions to be valued far outside any reasonable reckoning. Free market can also mean, "whatever the market will bear." Capitalism has run pretty much unfettered in the U.S. for centuries and when it's compounded by a celebrity-obsessed culture (where celebrities become rich people and rich people become celebrities for no other reason than because they are wealthy), it's easy to see how the accumulation of wealth becomes an end to itself. This nexus of celebrity and capitalism is also fertile breeding ground for a strange kind of parasitic life form exemplified by Paris Hilton; that is, someone with absolutely no value or redeeming qualities whose sole claim to celebrity is her proximity to family wealth. And with that comes an entitlement to indulge in whatever obnoxious, outrageous behavior they want to, since rich people and celebrities are different or somehow better than everyone else.

And lest you think I am unfairly picking on professional athletes, the same can be said for movie stars, rock musicians, and others who found a way to ride the capitalist gravy-train to stratospheric heights. In truth I am extremely unimpressed with athletes of all kind, and still maintain that any nurse, teacher, police officer, military person or firefighter in this country performs services of much more value on any given day than Jordan or Woods or any other athlete has ever done in their entire careers.

But without capitalism we would not have the high standard of living we do in this country. Capitalism fosters initiative, hard work, and enterprise. The lure of immense wealth entices people to invent and create, to make things better, to strive for the next level. But its dark side also brings greed and avarice. Capitalism by its very nature inevitably creates a class system, a "have" and "have-not" culture. Rampant capitalism coupled with a celebrity-obsessed culture creates ridiculous things like what we have now, where one percent of the population controls over twenty-five percent of the wealth in this country. Under what circumstances would that be considered healthy or fair? But anti-capitalism, also known as communism, has been a total and undeniable failure, as exemplified by Cuba, the former U.S.S.R and North Korea. Socialism keeps sputtering along in Canada and various European countries, but seems to be the most effective on a small scale, not in a country the size of the United States.

Back to the subject of bonuses: truthfully, I can't even imagine getting a million-dollar bonus. I wouldn't know what to do with that massive amount of money. What does a person have to do to be awarded a bonus of a million dollars at the end of the year? I can certainly see if a medical researcher finds a cure for cancer or blindness, they most definitely deserve a huge bonus, to be sure. But most people barely make a million dollars over the course of a lifetime. And what is it these Wall Street titans do? Create a lot of phantom wealth that only exists in the ledgers of accountants. Slice and dice a whole slew of bad mortgages, mix them up with some good ones, package them up as mortgage-backed securities and sell them to other greedy parasites as sure-fire, no-risk moneymakers. Then create ridiculous things like credit-default swaps which act as insurance policies against things that supposedly will never happen, but doggone it, did in fact happen and brought down Lehman Brothers and Bear Stearns, hobbled AIG to the point of collapse, and rattled the entire U.S. economy, once the undisputed powerhouse of the entire world in all of history, to its very foundations. So what do we do to fix things? Dole out bailouts in the form of trillions of dollars of taxpayer money, which we very well might never see again. And then give the financiers who are most directly responsible for this fiscal catastrophe huge, nonsensical bonuses.

This is where capitalism has landed us, surrounded by the fruits of our labors and also the poison of our greed. An astonishing, almost inconceivable amount of wealth has been both created and destroyed in this country over the past decade or so. Everyone is feeling the effects, and our lives have been profoundly, unavoidably changed in the past six months. Capitalism is the most viable, resilient economic system ever created, but it also has levied an extremely heavy price that we will be paying for many many years into the future.

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