Perhaps the most amazing thing about the AIG bonus scandal is the claim that it takes big bucks to retain top talent. Talent!? They ran a perfectly good insurance company into bailout-ville! With that kind of talent, who would be considered a talentless hack?
I suggest that we (the taxpayers and now the majority owners of AIG) outsource AIG's executive positions to India and China. If some poor schlub makes $20/hr. and produces goods worth $30/hr., he'll be let go if someone else (in a foreign land or perhaps Buffalo) can produce $20/hr. worth for compensation of $9/hr. After all, $20-$9 = $11 which is clearly > $30-$20 = $10.
Shouldn't the same reasoning hold for financial executives? Now here me out. If executives lose, say $100 billion, and get paid, say, $1 billion, shouldn't we be happy to outsource the position and pay maybe $100 million for somebody who will only lose $50 billion?
Let's take this a step further. It is probably pretty hard to make a profit because of competition and all that. But it should be pretty easy to break even. Not much "talent" at all in that. I bet that at $500k or a million a year (if Obama's tax on the rich goes through) there would be an ample supply of people talented enough to break even, a far superior outcome compared to the present.
In fact, I wish I were authorized to start taking applications or even drawing randomly from a qualified pool ... I would *love* to test this out in practice. I wouldn't want to take any random person -- we could end up with a Jerry Spring guest or Paris Hilton for goodness sake -- but say any random MBA from a top 25 business school. I would bet good money that s/he could outperform the current crop of top financial executives on a salary-adjusted basis. And that is all that matters, right?
