I’ve seen a few comments critiquing the obsessive focus on the AIG bonuses. The bonuses are, after all, a drop of a drop in the bucket of our overall costs. Better to focus on the bigger picture – whether to nationalize; etc.
The best response I’ve seen comes from commenter Andrew R. who introduced the “killed virus” theory in my last post:
Sounds about right. Remember that this debate isn’t taking place in a vacuum of abstract policy considerations. It’s taking place against a highly charged political backdrop with lots of angry, hurting people – in a country with a deeply-embedded “anti-big government” ideology. It’s an absolute political minefield.
In fact, one of my recurring nightmares is that Obama will ultimately be punished (in 2010 or 2012) for taking necessary but expensive measures on the banking front that will be mercilessly demagogued. It could potentially be a quite tragic choice for him in that sense – but that’s a post for another day.
Anyhoo, the point is that nothing will ultimately get done if the politics gets too toxic. People’s outrage simply cannot be ignored. And there’s more outrage to come. Straightening out the banks is going to be expensive and infuriating – though ultimately necessary. If a bit of cathartic AIG demagoguing helps make the larger reforms and stabilizations possible, so be it. I’m not going to be up at night worrying about the poor mistreated souls in the Financial Products division.
The critique above, then, gets its backwards. We’re not ignoring the larger issues by focusing on relatively minuscule AIG bonuses. We’re helping make the larger reforms possible by doing so. It’s a killed virus of outrage to promote economic health.
Plus, it promotes my own mental health. Venting in the defense of sanity is no vice.