An article in today's Arizona Republic reports that days ago, AIG hosted a $343,000 conference for 150 independent financial planners at the Pointe Hilton Squaw Peak resort in Phoenix.
Financial planners, of course, recommend insurance products to their clients, so this is a marketing event for AIG. Moreover, AIG managed to get 93 percent of the tab paid for by sponsors, and the financial planners paid a registration fee and their own travel. AIG paid the remaining cost — about $23,000 — out of pocket. That works out to about $153 per financial planner — an extraordinarily low cost.
But the gist of the article is that Congress is outraged by this extraordinarily cost-effective piece of marketing because it happened at a resort hotel.
In a statement posted on the Rep. Elijah Cummings's website, the congressman said he was "absolutely shocked and extremely disappointed" to learn about what he called "another executive day spa."
That's simply not an accurate description. The financial planners hosted by AIG aren't company executives, they're independent distributors of its products.
Second, what's AIG supposed to do, stop marketing? The AIG bailout had to be revised once already because its terms were too onerous. Is it now a de facto term of the revised bailout that marketing is prohibited?
Apparently it is. According to AIG, the company has canceled more than 160 meetings or conferences in the past month.
Now clearly, every company should be watching appearances and avoiding executive junkets, and no doubt some of those conferences deserved to be canceled. But let's remember, too, that the business of America is business. Cummings represents Maryland's 7th District. Perhaps he should take a quick lunchtime drive from the Capitol up I-95 up to his hometown of Baltimore, and take a look at the Inner Harbor, one of the most storied urban renewal programs in history. He might notice that its prominent features (and employers) include a conference center and several up-market hotels.
It's one thing to be a careful steward of taxpayer money. But if Congress makes legitimate business marketing the target of this sort of asinine, knee-jerk populism, it's not going to save taxpayers money, it is going to put AIG out of business.
And, if Congress isn't careful, airlines, hotels, taxi companies, restaurants, meeting planners, caterers, and plenty of other businesses will go under too.