AIG? I understand it all a little better


This is the current quilt. I got the stitch in the ditch around the stars finished. I did figure out a design to do and got started on it.

I had the tv on all day listening to the testimony of Mr. Liddy before congress. I must say I have a much deeper respect for Mr. Liddy. I didn't know he was a volunteer. Volunteers don't get paid to do a job. Mr. Liddy gets no compensation to run AIG except for one dollar per year. He was drafted (asked) to become a volunteer and said yes. Volunteers are under no obligation to stay as a volunteer.

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Here's what I understand from what I heard during the testimony. Hmmm..... let me put it this way. Suppose I was a quilt shop owner with 5 employees. I tell all the employees that the shop will be closing in 3 months because sales have fallen so much. I've done a really bad job of running my shop. I made a lot of bad decisions and now everyone must pay the price of those bad decisions.

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Hmm..... all the employees know the shop is closing so there's nothing to keep them from just quitting to go work someplace else leaving me with all the work to close the shop. I could hire some temporary employees who don't know the business but I'd rather have the experienced people. Get the idea so far? Ok.

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So... suppose I tell my employees that if they will stay with me until each department of the store closes I will give them an extra thousand dollars. I tell one employee I need her to stay until all the notions are sold. I tell another employee I need him to stay until all the storage rooms are empty. I tell another employee I need them to stay until all the books are sold. As each department is closed I will give them their bonus. This bonus has nothing to do with how well the job is done.... only that they stay until the job is finished.

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The employees want some kind of assurance that I will actually pay this bonus at the end. What's to keep me from saying I will pay the bonus just to keep them working but not pay it later? I write out a contract with them. Everybody signs it and we are all working to close the shop. Again, it's not based on performance but simply to retain the employee until his part is finished. (Performance bonus versus retention bonus)

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Ok, the employee who sells books does get them all sold in about two weeks so her part of the contract is fullfilled and she leaves. She earned her bonus. The next person empties out the stock room in about 4 weeks so his part of the agreement is done and he leaves. He earned his bonus. The other employees are still working with me to close the shop and earning theirs.

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Still following me? Ok. Suppose I meet a really nice person who I'm sure can help me keep my shop open. This person has the knowledge and experience that is needed to turn things around for me. I know this because I've seen other quilt shops stay open and become very successful with this person's help. I ask this person if he will help me but I can't afford to pay him. To my surprise the person says sure I'll help you. Just pay me one dollar.

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This person.... let's call him Mr. Smith.... goes over my books and comes up with a plan. Mr. Smith says that if I get a loan to buy different stuff he is absolutely sure my shop will stay open. He is absolutely sure it will be better than it was before. He shows me how I can use the loan to phase out some departments of my shop, start other departments, and repay my loan with the profits I will earn.

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So I get a loan from some friends, start buying new stuff, and reorganizing my shop. But wait.... I still have to pay the two employees their retention bonuses and pay the ones who are still with me too. It's a legal contract and right now I can't afford a court battle with lawyer fees, bad reputation, etc.

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So I pay the bonuses out of the loan I got from my friends. The friends find out about the bonuses and start screaming like crazy..... how could you pay bonuses when we loaned you the money to stay in business? Why would you pay bonuses when the employees did such a bad job at running the shop?

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They turn their anger onto Mr. Smith who is only trying to help me out. Some of the friends even threaten Mr. Smith. I wouldn't blame him if he just walked away because after all he's not getting paid to help me. Then the friends turn their anger toward the employees. They threaten to take legal action against the employees if they don't give the bonuses back. So the employees start giving back their bonuses because they are afraid of the mob mentality of my friends.

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My friends are very mad at me and Mr. Smith. They want heads to roll! The friends feel cheated and want some answers..... now! They call for Mr. Smith to come to a meeting with them where they can vent their anger over his bad decisions. Mr. Smith goes to the meeting. The friends spend the whole day venting their anger at Mr. Smith. Some know, but still don't understand, that he's not getting paid to turn my shop around. Others are truly interested in knowing what Mr. Smith believes is a good plan. At the end of the day Mr. Smith is still with me. He's still willing to help me turn my shop around.

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So that's my personal opinion and what I learned by listening to the testimoney of Mr. Liddy. He's doing his best to use his knowledge to turn AIG around.... and doing it for free. Yes, congress could fire him and choose another volunteer. But... who's going to volunteer to take over AIG after seeing the treatment that the first volunteer got? I think congress would do much better if they took the time to LISTEN more and vent less. I should do the same.

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Time for me to get to work.