AIG CEO gets slammed for lynching comments
Robert Benmosche's comparison of public outrage about bonuses at his company to hanging blacks in the old South isn't going over well.
Speaking to The Wall Street Journal, Benmosche claimed that public outrage over AIG employees getting rewarded after the insurer got a multibillion government bailout "was intended to stir public anger, to get everybody out there with their pitch forks 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."
The cantankerous executive has been forced to issue a public apology for his "poor choice of words."
U.S. Rep. Elijah Cummings, D-Md., the Democrat on the House Committee on Government Reform and Oversight and one of the leading African Americans in Congress, doubts Benmosche's sincerity.
"It's insulting to any taxpayer that helped bail AIG out," he told WBAL radio in Baltimore. "You can't just make statements like that and not get push back. I think he needs to go."
Perhaps that's an overreaction, but Benmosche's comments are further evidence of the disconnect between Wall Street and Main Street. Many people think the wealthy's lot has improved while their own economic situation is little changed or even gotten worse. A poll released Wednesday by Bloomberg shows that fewer people expect the economic recovery to strengthen this year.
AIG seems to have survived its government takeover just fine. It's share price has gained about 49% over the past year. Taxpayers made out as well, too, earning a $22.7 billion profit on the bailout after Uncle Sam sold all its shares in the insurer.
Maybe this could be a "teachable moment" for Benmosche, whose quest for a private jets was wisely shot down by the company's board. His view that AIG's workers shouldn't be penalized for the actions of a few rogues is understandable, if a bit politically tone deaf. Punishing the many for the actions of a few is unfair, and AIG workers also got death threats over the issue, which is inexcusable under any circumstances.
Likening the outrage over government bailouts to the deadly struggle for civil rights, however, shows a remarkable ignorance of both the past and present. Benmosche is going to have to back his words with deeds if he hopes to undo the damage he caused AIG's brand.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr and at Berr's World.
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