Leave the People Who Destroyed the World Economy Aloooooonnnnnne

Ezra notes that “it’s really worth distinguishing what are two separate arguments. The first is that we can’t claw back the bonuses. That’s what outside counsel told AIG Chairman Edward Liddy (Liddy was appointed by the government in 2008 and will not receive any bonuses) but legal experts don’t think it’s true. If the government is sufficiently interested in pulling back the funds, it can do so. The second is that we shouldn’t claw back the bonuses. That’s what’s animating Liddy’s argument that “we cannot attract or retain the best and brightest talent” if the government is mucking with their compensation packages.” In addition to this, I can imagine a hard-headed pragmatic argument that it would cost the taxpayers more to rescind the bonuses than it would cost to keep them and the people who sold the world for magic beans would get most of their money anyway.

What’s amazing about Ruth Marcus’s column is that it’s primarily motivated not by potentially defensible 1) and 3) but the utterly indefensible moralistic version of #2. She starts off sounding like she’s making argument #3: “in the short run, hammering the AIG employees to give back their bonuses risks costing the government more than honoring the contracts would.” I would need some evidence for this, but maybe. But she then continues, and essentially argues that the idiots are morally entitled to received performance bonuses for ghastly performance and retention bonuses even if many of them leave:

The worst malefactors at AIG are gone. The new top management isn’t taking bonuses. Those in the bonus pool are making sums that for most of us would be astronomical but that are significantly less than what they used to make. Driving away the very people who understand how to fix this complicated mess may make everyone else feel better, but it isn’t particularly cost-effective.

Oh my, people responsible for losing a billion dollars a week and largely responsible for plunging the world into economic chaos are receiving a somewhat lower astronomical level of compensation — only a Millionaire Pundit Values Fred Hiatt minion could cry a river of tears over that one. The rest of her argument collapses on itself. If they were responsible for the massive losses they obviously don’t deserve the money. If none of the remaining people are among “the worst malefactors” — if they were just functionaries carrying out tasks conceived by others — how indispensable can they possibly be? And most remarkably, Marcus seems to place no weight on the fact that the people who made the company insolvent wouldn’t be receiving one thin dime if the market were being allowed to operate and the company deservedly went out of business.

But here’s where it gets really bad:

But, you ask, what about autoworkers who are being squeezed to renegotiate their contracts? Those renegotiations mostly involve the future terms of employment, though, it is true, they also could affect retiree health benefits. If an autoworker doesn’t want to show up on the assembly line under the terms of a new deal, he or she doesn’t have to.

The “true” qualification gives away the show. So, if I understand correctly, the agreed-upon non-salaried compensation of white collar workers is absolutely sacrosanct, while that of blue-collar workers can be casually dispensed with. And if blue collar workers don’t like re-written contracts they know where the door is, but if white collar workers who are either inconsequential or responsible for turning a profitable multinational corporation into a zombie wealth-destroyer threaten to leave into a horrible labor market — heavens to Betsy, let’s find a few more million to keep them aboard! Perhaps we can take it from the health benefits of retired manual laborers!

I think I understand the Marcus worldview, and boy, is it ugly.