Keep Your Eye on the Ball

The pitchI woke up this morning, brewed a cup of coffee and flipped on “Morning Joe,” MSNBC’s political news program, like I always do. For about the fifth day in a row the hotly-debated topic under discussion was the same: AIG. Not just AIG, but how AIG, in good conscience, can give out $165 million in bonuses, while we, the taxpayer, own 80 percent of the company though our $175 billion investment in the company. This is very difficult to understand, especially now, when many of us are having a very tough time paying the mortgage.

Having heard enough of the story, I flipped to The Today Show right at the top of the first hour and guess what the lead segment was?  

Of course the bonus payments are unconscionable, especially in these very turbulent times. But this story is little more than a distraction, or at best, a metaphor for the times in which we live. Until we are out of the woods on this crisis, we must keep our perspective, and remember these three truisms:

1. We are not in the “million-dollar business” anymore;

2. We’ve passed the “billion dollar business;”

3. We are definitely in the “trillion dollar business.”

Given the extent of our financial woes, we simply do not have time to debate the millions, or even the billions. We have a TARP package that is approaching a a trillion dollars, a stimulus package that is most of a trillion dollars, and a $3.5 trillion dollar budget submitted by the president to the congress.

If we continue to be utterly consumed by these AIG bonuses, we are going to continue to waste precious time, brainpower, and resources on a distraction. There has never been a more important time than now to remain focused like a laser on the large pools of money and make sure that they are helping to loosen credit markets, sparking spending, helping the housing market, etc. This won’t be accomplished by having the president and his cabinet sucking up all the oxygen by going on every TV show to express their dismay and show their empathy. They should have foreseen this problem and put in some caveats beforehand (this administration and the last one). Now that they haven’t, it’s time to move on.

It gets me very nervous to see President Obama, Larry Summers, and other Obama cabinet members obsessed by AIG just because the media has a one track mind. That’s like losing your keys in the living room but looking for them in the kitchen because the light is better. I would rather have them watch the trillions than the millions. That’s because once you string a few trillion dollars together you are talking real money.

March 18, 2009 · Filed Under Book News, Management

Comments

5 Responses to “Keep Your Eye on the Ball”

  1. David Barnes on March 18th, 2009 10:23 am

    I am glad somebody is saying this. The situation is similar in the UK — the time of senior politicians is being squandered on these side shows.

    I would like to see a leader with the confidence to say “I don’t have time to focus on this right now”. In the long run, that can only be good for all of us.

    Economic turmoil encourages fascism. Bad though it is, it shows that people are ready to accept ruthless prioritization and focus in times like these.

  2. Jorrian Gelink’s Influential Blog » AIG Millions vs. Worldwide Trillions of Dollars on March 18th, 2009 1:56 pm

    [...] Krames, an author, editor and publisher wrote a stunning article on this week’s “focus of mass controversy”, AIG’s bonus payouts for individuals that have brought us to the recession we are in today, [...]

  3. George Thompson on March 18th, 2009 9:55 pm

    Yes, you’re right, but the President has to respond to the voters, the will of the people. Politics is a balancing act between what should be done and what constituents want done. I doubt that President Obama is really paying that much attention to the AIG situation. His focus has to be on the larger economy because that will, in the end, determine whether he has done the right thing. Anything he does about AIG will sway voters very little.

  4. Greg Hay on March 19th, 2009 4:29 pm

    I believe there is an underlying issue that you glossed over, and that is the amount of truth itself coming from AIG. One things these bonuses highlight is how the underlying culture at AIG has apparently not changed… they believe they are playing by their own old of rules, even though that 1) we, essentially, own them now, and 2) the game has *radically* shifted and changed.

    And when it is OUR trillion dollars they are using to play that game, you bet your keister that they better recognize #2. So far, they hav not, even in the slightest.

  5. Miki Saxon on March 20th, 2009 3:47 pm

    It’s difficult for most people to wrap their head around 12 figure numbers, let alone 15 figures, but six and seven figure numbers are much more understandable, so it’s the difference between anger over something concrete and something more ethereal. Also, it’s easier to focus anger on real, individual people.

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