AIG CEO: Anger over AIG bonuses ‘just as bad’ as lynchings

September 24, 2013
Robert Benmosche. (Bloomberg News)
Robert Benmosche (Bloomberg News)

AIG's CEO Robert Benmosche — who came in to rescue the company after the 2008 financial crisis — told the Wall Street Journal that the outrage over the bonuses promised to AIG's members was just as bad as when white supremacists in the American South used to lynch African Americans:

The uproar over bonuses "was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that — sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong."

Yes, enduring some public criticism for receiving multimillion-dollar bonuses after helping crash the global economy is a lot like being hanged from a tree by your neck until you die.

These kinds of sentiments don't emerge in a vacuum. Benmosche is expressing a view that was pretty common back in 2010 and 2011, when it was kind of a thing for members of the besieged 1 percent to compare public anger over their compensation to the way Nazi Germany treated the weak. There was supermarket mogul John Catsimatidis:

“Taxes are going to go up regardless. What I’m afraid of is, we shouldn’t punish any one group. Whether we’re punishing people who are wealthy,” he said. “New York is for everybody; it’s for the poor, it’s for the middle-class, it’s for the wealthy. We can’t punish any one group and chase them away. We – I mean, Hitler punished the Jews. We can’t have punishing the ‘2 percent group’ right now.”

Blackstone's chairman Steven Schwarzman had this to say:

“It’s a war,” Schwarzman said of the struggle with the administration over increasing taxes on private-equity firms. “It’s like when Hitler invaded Poland in 1939.”

I was in an off-the-record meeting with top Wall Street folks where similar comparisons to Nazi Germany were tossed around. It really was a meme on Wall Street that the singling out of the wealthy for criticism — and, more to the point, taxation — had a direct historical precedent in Nazi Germany, where the Jews were first demonized, then taxed, and then, well, you know. The sense was that the rich in general, and Wall Street in particular, weren't just being criticized, but that they were being turned into a dangerously despised minority.

That's the context of Benmosche's comment. I would bet he's made the same point a number of times in private rooms to appreciative nods. When you say and hear that kind of thing often enough, however, you forget how insane and offensive it is — and then you say it to the Wall Street Journal.

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Neil Irwin · September 24, 2013