Things really suck out here. Them on Wall Street suckered us good. We on main street let ourselves be suckered. And, now our hard-earned tax dollars have to pay for the privilege of being sucker punched. Yah, it sucks.

But, I really think the populous is getting a bit too nutty. This latest AIG witch hunt is just nonsense. And, if people would stop waving the smoldering torch in each other's eyes for a moment, the rest of the lynch mob might be able to realize that what they are doing is counter-productive.

Let's do a quick analysis of our go to market plan:

1. We, the taxpayer, loaned AIG $170B. Like it or not, that's what we did.
2. You and I now own 80% of AIG. We are the new majority shareholders. Woohoo!
3. Now, we (as taxpayers) have begun a witchunt against our (as AIG owners) executives in effort to reclaim $168M of the $170B loaned. FYI, this is 1/10th of 1%! So, for every $100 loaned, we are trying to recoup less than 1 dime!
4. As part of our hunt, the "we" (as taxpayers) are trying to get the "we" (as AIG owners) to break our pre-existing employment contracts with our executives. This is illegal and creates a liability for us. Oh, we are also scaring the devil out of our remaining execs and putting the other...oh...$169.832B of our investment at risk.
5. Now, our duly elected politicians are using the taxcode to punish these execs -- besides being arguably unconstitutional, this puts all of our (as taxpayers now) liberties at risk. Oh, some politicians are even calling for them to kill themselves!

OK, now put down your war drum for just a second longer and let me elaborate. First off, yes, I know that 52% of AIG execs aren't even there anymore. And, I further realize that any remaining ones (that were in any way associated with the credit default mess) do *not* deserve a dime. But, damnit, a contract is a contract. If you sign a contract with me that says that you will pay me $100 for every $5 of yours that I lose. Then, doggone it, when I roll up a big wad of $50 and smoke it with my feet on your desk while looking you dead in the eye, I expect my $1,000 bonus.

Ask me if I think we should have bailed out AIG? Hell no. As I already wrote, I am pissed that big companies can't fail, but little honorable companies can.

Ask me if I am pro Wall Street? Far from it. I believe in making money by making stuff, not by trading bits of electronic data. Plus, the lack of oversight has always terrified me.

But, I do believe that as a society, we should honor our contracts. Without rule of law, we have anarchy. By making law on the fly, we trend toward totalitarianism.

I say, let's stop the cries for the public stockade for these execs. We already bought them a shovel. Let them dig their way out of their mess with it. That seems a far better endgame than us using that shovel to dig them a row of shallow graves.

Kisses,

Chris Lyman
Fonality CEO & Janitor
Follow on twitter!
Challenge Chris to tackle a topic!
Subscribe to the CEO/Janitor's Blog

P.S. For those of you that got this far without breaking out the anthrax, you may find this letter today from an AIG exec in the New York Times interesting.