Outraged at the Outrage

OUTRAGE
I’m outraged! No, not at AIG for following through on its contractual obligation to pay retention fees to its employees. No. I’m outraged at the ribald public sentiment. I’m furious at the cavalcade of vituperative admonishment, issued en mass by the American populous, and directed at an injured company for its attempts to motivate valued employees whose obligation it is to fix a system which had suffered a structural failure.

Well, perhaps my diction is spiced with a bit of hyperbole. Indeed, there are valid reasons to be upset ($165 million sounds a bit excessive, and the timing for such a payout is exceedingly poor with regards to public sentiment) but there are also valid reasons, NOT to be upset. After all, is the real value of the bonus actually considered “large” by financial industry standards? Or is it relatively modest or average? Recall that actors and professional athletes earn comparable sums. However, most importantly, $165 million is a infinitesimal sum when compared to the $182 BILLION which the government has issued as a bailout.

Let’s see… plugging that into Excel yields…that’s 165,000,000 divided by 182,000,000,000 equals 0.0009 or 0.09%. Less than zero point one percent. But let’s make these numbers more tangible.

WOULD YOU BE OUTRAGED IF…

1) You bought a new Dell laptop for $500 (after tax, etc.) and the final charged ended up being 500 dollars and 45 cents!

2) You bought a new Honda Civic for $15,505 (after tax, etc.) and a ten dollar surcharge was added to the final bill. $10!

3) The U.S. government said that a war in Iraq would cost $60 billion and it ended up costing $50,000 more. Wait, wait, wait…. The actual cost of the war (by the Pentagon’s own estimate in 2008 was $600 billion. That’s not 0.09% more, that’s 1000% more! And according to the Congressional Budget Office and other analysts cited in the same article, the final cost could be closer to $2 Trillion! That’s 3.3 MILLION PERCENT MORE! Now that's something to be a little irritated over. (sorry for all the caps).

REAL OUTRAGE

So, via point #3 above, if Americans are so outraged over 0.09% of a budget being poorly allocated, shouldn’t we be at least ten thousand times more outraged over the miss-estimation of funds allocated to the Iraq conflict? (that's 1000/0.09)

A final disjointed note: lexicographers will note that the word “bonus” has likely contributed to as much contention as any other aspect of this event. If the word “retention fee” had been used instead, we would likely all be less outraged, and more able to focus on what we really should be beside ourselves about.

A final, final note: the retention fee really is poorly timed and perhaps points to deeper systemic iniquities in the financial industry as a whole.

references:
http://www.cnn.com/2003/ALLPOLITICS/01/01/sproject.irq.war.cost/
http://www.nytimes.com/2008/03/19/washington/19cost.html?ref=world