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After writing a blog post at work yesterday about the AIG junket that wasn't , I was fascinated, and horrified, to go home and watch all the actual TV coverage.
This total non-story made it onto just about every news outlet you can imagine, including segments throughout the day on CNN. The height of ridiculousness was that AIG CEO Ed Liddy was forced to go on Larry King Live — as the first guest — to defend this ordinary conference against charges of being an executive boondoggle. (CNN realized midway through the day what a joke this story was and began inserting some balance into its reports, but couldn't stop pumping it in advance of the Larry King show.)
The absolute nadir was the original, breathlessly reported exclusive undercover investigative report by the Phoenix ABC affiliate. If you thought it was impossible to make something as excruciatingly boring as a 3-day insurance conference sound like an orgy at the Playboy Mansion, well, just click the video.
(Way to go, ABC15 reporter Josh Bernstein. Stay tuned for his story six months from now on why the bottom suddenly fell out of the Phoenix conference business.)
Or simply click on the slideshow to see the AIG executives "sitting poolside, drinking coffee, while other people attending the conference were in meetings." Coffee? Good grief! What a debauched bunch these insurance executives are. And how odd that they don't attend training sessions describing products that they designed!
Despite the fact that these guys were meeting in suits and ties at a table, surrounded by briefcases overflowing with work folders, other media outlets quickly began reporting that they were "lounging by the pool." Speaking from personal experience, having a meeting in the pool area of a conference hotel with your work colleagues in a dark business suit and tie in the hot sun is closer to a waterboarding than a boondoggle on the spectrum of creature comforts. The only reason anyone does this at all is that they're desperate for fresh air after days of inside meetings.
As AIG has admitted, it has behaved abominably in the past. Issuing billions in credit default swaps? That's terrible risk management. AIG executives hunting quail in the English countryside? That's a boondoggle. Putting on conference for financial planners that sell your product? That's good marketing.
The inability of the media, the government, and the public to distinguish between corporate excess and ordinary business is the result of the very same financial illiteracy that got us into this mess in the first place.
Most media outlets took great glee in reporting that this supposed "executive day spa" took place at the same time AIG's original bailout was revised. But most failed to note why it was revised: the terms were so onerous that they put AIG at risk of failing anyway. That's hardly good for taxpayers.
And pouncing on this company every time it attempts to conduct normal business anywhere other than an IHOP (as one CNN anchor suggested) is also a great way to make sure the bailout fails and we taxpayers never see that money again.
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