What do Alex Rodriguez and A.I.G. have in common? More than you think
Today on adult “Sesame Street,” privileged, greedy piggies
that start with A. The cases in point are Alex Rodriguez and AIG. At first glance, there’s not much to
connect a baseball player and an insurance company, but allow me to suggest
that both are examples of how unregulated capitalism turns the American Dream
into the American Nightmare.
Let’s start with the fact that A-Rod is Major League
Baseball’s highest-paid player, and that AIG was once the world’s most valuable
insurance company. That would be enough for most folks but, alas, it goes
against the grain of a culture that all too often emphasizes maximizing value
beyond the bounds of what reasonable people would call ‘enough.’ Alex Rodriguez
was once heralded as the most talented player in baseball, skills that earned
him a contract that yielded $30 million per year for suiting up for a game boys
play for free. Not a bad deal, by any means. A-Rod was gifted with a body and
skills that fantasy players would have sold their souls to possess. He was on
track to become baseball’s all-time homerun leader and a shoo-in for the Hall
of Fame. Then he lost his edge and, for a time, was considered merely as among
the top five players in the game.
Who among us would not wish to be in the top five of the
pursuit of our passion? Alas, American culture places little value on being
other than number one. Remember the Olympic swimmer who wept with
disappointment because she only won a
silver medal? Name the player who finished third last year in the Most Valuable
Player voting for any American sport.
So when Rodriguez slipped from the top, A-Rod became A-Roid and he
sought illegal supplements to give him back his edge. In so doing, he will be
suspended for his role in the Biogenesis Clinic scan. He very well may have
damaged his health permanently by pumping poisons into his body. A-Rod now has
little chance of catching Babe Ruth (#3) on the all-time homerun list, and
virtually none of surpassing Hank Aaron (#2) or Barry Bonds (#1). He may not
even get the chance to hit 14 more to pass #4 Willie Mays. There’s a pretty
good possibility that, once the farcical dust has settled, the Yankees will
void his contract and that A-Rod will be banned from Major League Baseball. So
long Cooperstown.
Alex Rodriguez was vain; AIG was/is arrogant. It’s currently
suing the government to recover untold billions it claimed it lost during the
period of time the government controlled 80% of its stock. Talk about ingrates!
AIG took $182.3 billion of taxpayer money when it was near collapse in 2008 and
now has the audacity to moan that stockholders were shortchanged of potential
dividends during a period of time in which they could have wiped their rear
ends with their stock certificates if Uncle Sam hadn’t saved their heinies.
American International Group was in the insurance business,
but it used over $440 billion in credit default swaps to insure securities
mostly tied to the mortgage market. In essence, it used the value of its
insurance portfolios to buy mortgage securities that turned out to be
overpriced. It also dabbled in hedge funds, derivatives, and other high-flyer
games. In other words, AIG played the Stock Market with funny money—on-paper
assets based on wishful projections of the future. Mind, it did all of this
while it was already under investigation for questionable practices in the
field of what was putatively its number one product: insurance. And it did so
at a time in which it was a multinational company doing business in over 130
nations and had a workforce of around 118,000. Its total assets were valued at
over $1 trillion. Don’t you think that would be enough?
I guess it wasn’t enough merely to dominate the insurance
industry. Maybe AIG executives couldn’t countenance the fact that there were actually
17 richer companies in the world. I can’t think of what else would prompt them,
including Hank Greenburg who was forced out in 2008 and is now championing the
lawsuit against the government, to gamble in the Stock Market like a Vegas
drunk holding at 15 who just doubled down a blackjack bet with his last
hundred. In 2013, AIG is still a big firm: 63,000 employees in over a hundred
nations, though its current capitalization value is a paltry $57.5 billion.
Like A-Rod, AIG is busy blaming others for its woes. We can
only hope that both A-Rod and AIG go away. If there’s one thing we no longer
believe, it’s that any star or company is too big to fail. Let them perish, and
don’t expect a lot of mourners to line the graveside. Write the epitaph:
“Choked to Death on Self-Fed Greed.”
As for we survivors, it’s time to change the culture. Salary caps and a
restoration of business regulations would be a good place to start. The wisdom
to quit while we’re ahead would be even better.
