Editorial: All about greed (Times Argus)

The average American taxpayer may have difficulty grasping all the nuances and subtleties of high finance, or the imperatives that drove the president and the Congress last week to spend $700 billion to rescue Wall Street and the financial community, but one startling disclosure on Capitol Hill yesterday was easy for anyone to understand.

Thanks to Rep. Henry Waxman, who was chairing a hearing on the near-collapse of the world's largest insurance company, AIG, the American public now knows that less than a week after the federal government offered AIG $85 billion to restore its financial equilibrium the company's top executives treated themselves to a week-long retreat at a luxury resort in California at a cost of $440,000.

As he showed photographs of the resort, Waxman said the executives spent $200,000 for rooms, $150,000 for meals and $23,000 for use of the resort's spa. For those who might be predisposed to dismiss the committee chairman's words as the partisan palaver of a liberal Democrat, consider what Rep. Mike Souder, an Indiana Republican, had to say about the AIG extravagance:

"This unbridled greed, this callous abuse of trust of hard-working Americans' savings is just so disgusting it is hard to put into words, and the anger level in America is coming, as it often has, at Wall Street," Souder said.

"They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills," Rep. Elijah Cummings, a Maryland Democrat, fumed.

In addition to disclosures about the frolic at the resort, Waxman's committee heard yesterday that (and this is even more infuriating) Joseph J. Cassano, former AIG executive who headed its London-based division - the very division whose collapse has been largely blamed for the company's downfall - continues, to this day, to be paid $1 million a month by his employer. And that's on top of the $280 million he had received in the past eight years.

Compounding the outrage, an accountant hired by AIG specifically to deal with the company's accounting problems was denied access to the records of the unit where the losses, mostly in credit-default swaps, led to the bailout, the committee was told. Joseph St. Denis, the accountant, reportedly resigned in protest. Good for him.

The federal government came to AIG's rescue on Sept. 16, after the company was unable to find private banks and investment firms to lend it the money it desperately needed. On Capitol Hill, some lawmakers said AIG was a private enterprise that should have been regulated more closely. The issue of regulation vs. deregulation for America's financial markets has become part of this year's presidential election campaign, with each side blaming the other for the distress on Wall Street.

Sorting out the political responsibility for the fiscal bloodbath that continued yesterday - the Dow Jones Average fell another 500 points - may be important, but it won't be easy.

However, ordinary people - the "hockey moms" we hear so much about in this year's election - surely recognize greed when they see it and almost certainly believe, with unshakable conviction, that it has played a huge role in causing the present crisis. What's even more alarming, though, is that greed apparently continues to fuel the irrational behavior of top executives.

Compared to the $700 billion of taxpayer money that has been put at risk, the amount the AIG brass spent on that California resort may be a drop in the bucket, but it says a great deal about the moral compass guiding these greedy people.