Much Ado About Nothing

Today I am shedding a little "lyte" overreaction.  Congress, the mainstream media, the blogosphere, hell even my dog, are all up in arms over the bonuses awarded to executives at AIG.  I'm guilty, I blogged about it myself.

But in our rush to lynch AIG, we need to direct our anger at another set of letters, the SEC or the Securities and Exchange Commission.  Now, they had nothing to do with this brouhaha over bonuses, but they do have a lot to do with how our economy tanked in the first place.

For the last eight years, the SEC has presided over a financial sector gone mad.  Where were they?  I know the Bernie Madoff's shenanigans were brought to their attention.  They did nothing. I know that they were investigating AIG's financial products division back in 2006, but again the investigation was called off.  A question needs to be asked, why were these investigations called off and who made that call?  Bernie Madoff hadn't made a single trade, but the SEC couldn't discover that?  Remember, he turned himself in, no one caught him doing anything.

Now the pitchforks and torches are being directed at Senator Chris Dodd for removing the bonus cap language from the stimulus bill.  He apparently did this at the request of the Treasury Department.  More than likely this request was made in an effort to cull bipartisan support for the bill.  The Republicans are suddenly reversing themselves on limiting executive compensation; they were against it, now they are for it.  Sort of.  They don't want to do anything about it, they want the Treasury Secretary (who they claim they have no confidence in) to do it.  Maybe so they can blame the administration?  Or maybe because, once again, they don't have a clue or a plan.

It seems like a lot of energy and indignation is being spent on something that will do nothing for the economy, but will give a lot egos some air time.  AIG showed incredible tone deafness in awarding these bonuses, but they are legal and constitute a mere one-tenth of 1% of all the monies they have received to date.  

We need to ignore the sideshow and focus on the main event, or we risk wasting this opportunity.  We must eliminate the "you're only as good as your last quarter" mindset that awards greed and punishes prudence.  We need our corporations to focus on pleasing their customers, not their shareholders.  We need to regulate our financial markets and make sure those regulations are enforced, not ignored.  We need to identify the true architects of this disaster and make sure they never have the chance or the incentive to do it again.  We need to put down the pitchforks and put on our thinking caps.