BLOGS BY BOB

 Wikipedia:  http://en.wikipedia.org/wiki/Hubris

Hubris (/hjuːbrɪs/) or hybris (/’haɪbrɪs/) (ancient Greek ὕβρις), mythology is a term used in modern English to indicate overweening pride, superciliousness, or arrogance, often resulting in fatal retribution. In ancient Greece, hubris referred to actions which, intentionally or not, shamed and humiliated the victim, and frequently the perpetrator as well. It was most evident in the public and private actions of the powerful and rich. The word was also used to describe actions of those who challenged the gods or their laws, especially in Greek tragedy, resulting in the protagonist’s downfall.

Does any of this sound familiar?  Not only does it pertain to the A.I.G. situation but to several others as well.  Blue Cross and Blue Shield of North Dakota is a mini-A.I.G. but even worse is the fact that the very politicians that are berating A.I.G. for its excesses, are quietly ripping off the very taxpayers they represent.  Let’s start with North Dakota Blue Cross and Blue Shield (BCBS).  “North Dakota,” you say?  Yes, North Dakota a small state with an abundance of hubris (you think New York has a monopoly on arrogance?). www.in-forum.com (The Fargo Forum newspaper charges for access to archived stories).

North Dakota’s biggest health insurance company has had a policy of rewarding key employees and their spouses with trips to exotic places to participate in unnecessary meetings.  This reward was given in spite of the fact that North Dakota BCBS lost $9 million last year.  The most recent absurd perk was a trip for some executives and spouses to the Cayman Islands at a cost of a quarter of a million dollars of member’s money.  Money they paid to get health insurance at rates that go up every year.  It would seem to me that members of BCBS of North Dakota (and elsewhere) have a right to expect that their money will not be used for frivolous purposes ever…never mind when the company is losing money.  It makes you think — how many other insurance companies are doing the same thing, charging outrageous prices for their product and then spending the money on ridiculous perks for incompetent executives? 

But North Dakota BCBS didn’t stop the nonsense with the $250,000 trip.  When the outrage over the travel perks got so loud they couldn’t stand it they fired CEO Mike Unhjem.  “Hooray,” you say.  Not so fast — they fired him but gave him $2 million to get out.  He was given two million dollars for losing $9 million and then rewarding his subordinates for their poor management skills.  Maybe if he had been involved in an armed robbery they would have given him four million.

And then, according to the National Taxpayers Union there are members of the U.S. House and Senate along with other federal employees who (http://www.ntu.org/main/press.php?PressID=343) enjoy a vast web of perquisites that benefit them personally as well as professionally, including:

• Pension benefits that are two to three times more generous than those offered in the private sector for similarly-salaried executives. Taxpayers directly cover at least 80 percent of this costly plan. Congressional pensions are also inflation-protected, a feature that fewer than 1 in 10 private plans offer.
• Health and life insurance, approximately 3/4 and 1/3 of whose costs, respectively, are subsidized by taxpayers.
• Wheeled perks, including limousines for senior Members, prized parking spaces on Capitol Hill, and choice spots at Washington’s two major airports.
• Travel to far-flung destinations as well as to home states and districts. Despite recent attempts to toughen gift and travel rules, “junkets” are still readily available prerogatives for many Members.
• A wide range of smaller perks that have defied reform efforts, from cut-rate health clubs to fine furnishings.

·         Exemptions and immunities from tax, pension, and other laws that burden private citizens — all crafted by lawmakers themselves

On October 3, 2007 MSNBC reported an Associated Press story headlined, GAO finds employees used $146 million on unjustified premium-class travel   (http://www.msnbc.msn.com/id/21107902/)

WASHINGTON – Federal employees wasted at least $146 million over a one-year period on business- and first-class airline tickets, in some cases simply because they felt entitled to the perk, congressional investigators say.

A draft report by the Government Accountability Office, obtained Tuesday by the Associated Press, is the first to examine compliance with travel rules across the federal government following reports of extensive abuse of premium-class travel by Pentagon and State Department employees.

The review of travel spending by more than a dozen agencies from July 1, 2005, to June 30, 2006, found 67 percent of premium-class travel by executives or their employees, worth at least $146 million, was unauthorized or otherwise unjustified.

Where was the congressional outrage about the GAO report?  It’s almost as much as the amount paid out by A.I.G. in bonuses to the employees that ran the company into the ground.  The point in this blog is that we can’t have double standards — one for business and the other for government.  I think A.I.G. and North Dakota BCBS actions are reprehensible, but I also think that the standard should apply to our elected and appointed officials as well. 

Please comment here or by email bob@baronson.org.  Also, please read and comment on my Organ Donation and Transplantation blogs on http://bobsnewheart.wordpress.com .   You can visit my Facebook site, Organ Transplant Patients, Family and Friends at http://tinyurl.com/225cfh  OR — my Facebook home page http://www.facebook.com/home.php  

According to the New York Times the American International Group (A.I.G.) will pay or has paid more than $165 million in bonuses to the very executives that nearly caused the company to collapse.  The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses (http://www.nytimes.com/2009/03/15/business/15AIG.html?em) this from a company that has borrowed $170 billion in U.S. Taxpayer dollars and is now 80% owned by the U.S. Government. 

While U.S. Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke have strenuously objected to the plans, the company says the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.   A.I.G. argues that the bonuses were promised last year before the crisis and cannot be legally cancelled.

What’s wrong with this picture?  I was in the work force for over fifty years when I retired and was never promised a bonus regardless of performance.  Frankly, I performed very well in every job I ever had and most often got no bonus at all.  My reward was to keep my job.   How is it that people get promises of rewards before they do anything?   It’s no wonder that the great middle class thinks our justice system is totally biased toward the rich. 

Here’s what really grates on me, though.  The CEO of A.I.G. Edward M. Liddy says, “We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses without these bonuses.”  What?  If these people who; ran the company into the ground, caused thousands of people to lose everything they have, precipitated a huge market crash and cost the U.S. taxpayer billions of dollars,  If these are the best and brightest I’d like to know by what measure.  By my standards they are the dumbest, densest, most dishonest and dreariest.  These people should be fired and perhaps imprisoned but they certainly should not be rewarded.

If we are to adopt A.I.G. standards then perhaps Bernie Madoff should get a reward for doing such a great job of fleecing thousands of people out of $65 billion.  Maybe Enron executives who engineered that debacle should be given bonuses and expense paid vacations on the French Riviera and — let’s drain the treasury to pay those responsible for the Exxon Valdez incident for the wonderful work they did in destroying the Alaskan environment.

I have been and am a supporter of the Obama administration’s efforts to pull us out of the financial quagmire that the Bush administration got us into.  But, my patience is limited.  Are we to say, “Oh, sorry we didn’t know you were contractually obligated to pay bonuses…so we’ll find a way to give you even more money?” Put the brakes on Mr. Obama, or the American public will turn on you faster than a duck sliding through Valdez oil. 

If nothing else, the Obama administration should make sure that every bonus penny gets paid back to the taxpayer with interest and they should insist that every A.I.G. executive who was in any way responsible for he corporate collapse be fired.   Being as we own 80% of A.I.G. it would seem that we should have some leverage in the way the company is run.  To quote Joe Scarborough on MSNBC, “We need to crush those people….crush them.”   

Please comment here or by email bob@baronson.org.  Also, please read and comment on my Organ Donation and Transplantation blogs on http://bobsnewheart.wordpress.com .   You can visit my Facebook site, Organ Transplant Patients, Family and Friends at http://tinyurl.com/225cfh  OR — my Facebook home page http://www.facebook.com/home.php  

A recent New York Times column headlined, “You Try to Live on $500,000 in This Town” made the case that President Obama’s limit of a half million a year for executives whose firms took federal money, was a hardship.  The column by David Pogue, which sounded tongue-in-cheek, http://www.nytimes.com/2009/02/08/fashion/08halfmill.html?em attempted to justify $30,000 a year for women’s charity ball gowns, $45,000 a year for a nanny, $32,000 a year per student for private school and, of course, the need for men to wear Brooks Brothers or other exclusive clothiers suits.  Additionally he pointed out that many of these people took two vacations a year at $16,000 per vacation.  The premise is that an executive, successful or not — must keep up appearances. 

I can’t believe the arrogance that would cause some executives to complain about hardships when millions are out of work and therefore without healthcare, people are losing their homes and bankruptcy claims are reaching record proportions.  Poor executives — only making $500,000 a year.  Let us take up a collection so we can help them pay for their Mercedes’, vacations and ballroom clothing.

Let me quote from the Pogue column:  

“Not every bank executive has school-age children, but for those who do, offspring can be expensive. In addition to paying tuition, “You’re not going to get through private school without tutoring a kid,” said Sandy Bass, the editor of Private School Insider, a newsletter that covers private schools in the New York City area. One hour of tutoring once a week is $125. “That’s the low end,” she said. “The higher end is 150, 175.” SAT tutors are about $250 an hour. Total cost for 30 weeks of regular tutoring: $3,750.

Two children in private school: $64,000.

Nanny: $45,000.

Ms. Bass, whose husband is an accountant with many high-end clients, said she spends about $425 every 10 days on groceries for her family. Annual cost: about $15,000.

More? Restaurants. Dry cleaning. Each Brooks Brothers suit costs about $1,000. If you run a bank, you can’t look like a slob.

The total costs here, which do not include a lot of things, like kennels for the dog when the family is away, summer camp, spas and other grooming for the human members of the family, donations to charity, and frozen hot chocolates at Serendipity, are $790,750, which would require about a $1.6-million salary to compensate for taxes. Give or take a few score thousand of dollars.”

The point seems to be that a New York City executive must make at least $1.6 million a year just to survive – just to survive.  I don’t begrudge high salaries for top executives who make billions for their company, and therefore provide employment for thousands; obviously successful people should be rewarded.  Where I draw the line, and so does President Obama, is paying outrageously high salaries to executives who have led their organizations into near bankruptcy and then go hat in hand to the government asking for money to cover their poor judgment and mismanagement.  These people have caused a near depression not only in the United States, but for the whole world.  Frankly, I think they should be forced to live like the people they put out of work.  Try that on for size Wall Street!

Well, reader, what do you think?  Please comment or send me an email at jaxbob.gmail.com. 

Also, please read and comment on my Organ Donation and Transplantation blogs on

http://bobsnewheart.wordpress.com .   You can visit my Facebook site, Organ Transplant Patients, Friends and You at  http://tinyurl.com/225cfh  OR — my Facebook home page http://www.facebook.com/home.php