How Bad Are AIG Execs? Compare 1940s Nazi Germany vs AIG 2009

After hearing so much from both sides of the coin about AIG and their executives - who have suddenly realized how the law works, when it benefits them - I finally figured out a proper analogy over the situation at hand.

To begin with, assess what a "bonus" really is. It is an enticement, an award for a job well done. It is given to someone who has benefited others. To go back a bit, there used to be regulations and laws against bad risks in business. Eventually the system was deregulated, which is how problems began. AIG was just another insurance company, who found a way to jump onto the mortgage industry. They began guaranteeing banks around the world, opening doors for very bad risks in the housing market. Practically anyone could buy a house, in some cases even with no job.

AIG basically said, "Just do it." to the risky lending and never thought it would bottom out. Sounds like a pyramid scheme. Well, the inevitable, and unthinkable happened - it bottomed out. All the top AIG execs had been pushing in that direction, and they got the pay-off - a failed company. And now that the Fed and American people have to foot the bill to get it back on its feet (and basically cover some bad home buyers too), the AIG execs expect bonuses that they were promised in contract. The bad thing is - it's a legal demand. The moral thing is - it's wrong! It was those same execs that got us into this mess to begin with. They should be in prison for doing what they did, essentially a sham. But alas, it still was legal at the time.

Moving back to where I started, my analogy. Follow this (partially) hypothetical thought -

Nazi Germany, 1940s.
An Auschwitz prison guard is entrusted to "do away with" the prisoners. He is contractually offered a bonus if he "keeps his numbers up." And so he does, because that is the law of the land at that time.

1945, America wins. Recognizing that Germany itself is essentially good and necessary (unlike the Nazis), America offers to pay reparations to rebuild Germany into a sound structure again.

The Nuremberg trials (which represents America's current outrage, 2009). All the prison guards are being questioned for their part in atrocities. The one particular Auschwitz guard brings up, and demands his bonus for his exemplary work in what he was asked to do.

The moral question here:
1) Is the guard entitled to his contractually promised bonus, for "doing a good job" for his superiors, as he was asked to do. Or,
2) Should he go to prison for being part of the whole problem, hurting people along the way, and helping to get Germany (as in AIG) into the very mess of needing to ask for reparation money to begin with?

And so it's no wonder that AIG head Edward Liddy has asked his employees to give back the bonus money. BUT, it's doubtful that Liddy's intentions were honorable. Liddy in fact made it public that the very executives who received their bonus money, were now (justifiably) receiving death threats. So the money return is more to ensure that no harm comes to AIG employees or their families.

Note to Edward Liddy and the AIG cronies -
Japanese culture has had a long-standing ethical custom called "Hari Kari." That is suicide by blade, done when one has committed shame upon his family or superiors. Although, I would suggest that more for Bernie Madoff, whose actions actually have caused suicide in innocent people.