A Lesson in Chutzpa, Courtesy of AIG


hoffBy Rabbi Naphtali Hoff

The most recent scandal involving American Insurance Group (AIG), which erupted after the embattled bailout funds recipient distributed $170 million in executive bonuses, has shaken Washington to its core. Outraged politicians, echoing the anger and disgust of their constituents, have roundly condemned the insurance giant, and have used all of their legal power to ensure that the monies be returned “to the taxpayer”. Republicans are also calling for the resignation of Timothy Geithner, under the pretense that President Obama’s beleaguered Treasury secretary was aware of the bonuses and failed to prevent their distribution.

Of course, we are all offended by the sheer greed and corruption (dare I say chutzpah?) displayed by AIG. We find it shocking that this company, which was forced to its knees because of gross mismanagement and poor decision making (to the point where it has been forced to take billions of dollars of government aid just to remain viable), can now turn around and distribute millions of dollars in bonuses to the same executives who caused the disaster in the first place.

We wonder where their shame is. We cannot understand their insolence, nor can we tolerate their perverted sense of justice. Moreover, we ask why it is that they are not doing everything possible to become financially solvent, while continuing to curry the favor of the American people, rather than to spit in their collective faces.

Perhaps at least some of the answer lies with the collective tarnish which AIG’s reputation has already suffered, causing its executives to stop caring much about propriety and public opinion. In fact, they must have stopped caring months ago, when they invested thousands of dollars on expensive junkets and retreats for its executives after its first bailout. Talk about the perseverance of corporate greed and self-servitude in the face of adversity!

While we would naturally think that AIG’s executives would aim to be on their best behavior at this time, we see in fact that the exact opposite is true. Due to past incompetence, there is no way for AIG execs to emerge with a restored sense of pride and competency. As a result, they have nary any incentive to try, and have instead pursued a greedy, opportunistic path to get whatever they could and run.

(Of course, they could not run far or fast enough. The rage which erupted once the shocking news was revealed led to swift action on Capitol Hill, who worked feverishly to retrieve the bonus money by slapping a 90% tax on that income. AIG employees have also borne the brunt of widespread national indignation, in which their name has become the butt of endless jokes and banter. Moreover, workers have been confronted with the threat of physical harm, leading corporate security to direct employees in an internal memorandum to take a series of measures “to increase their overall safety and security” due to “a growing sense of public attention fueled by increased media scrutiny.”)

If educated, previously successful corporate executives could be so negatively affected by their lowered status as to willingly subject themselves to public anger and humiliation, one can imagine the type of impact that failure and negative experiences can have on our fragile, sensitive children.

Many of our children struggle to behave respectfully towards their parents, teachers and other adults that they interact with. The reverence and compliance that we expect of them – and which we nostalgically attach to our own conduct as children – is often far removed from their young hearts and minds.

Surely, there are many dynamics which contribute to this problem, far too many to detail in this essay. However, one causative factor would appear to be the lack of true success and satisfaction that so many of our children have felt in their formative years, academically, socially, or otherwise.

Let us use school as an example. It is widely agreed upon within the education community that children who struggle in school to achieve academically are far likelier to also engage in problematic behaviors. And while many such behaviors (such as classroom disruption and truancy) do not all fall within the traditional realm of chutzpa per se, most indicate at least some lack of appreciation and reverence for the classroom and the teacher.

Children feed off of their successes as well as their failures. When they taste success and are praised for their performances, they typically aim to achieve further successes. Conversely, students who routinely face failure, and do not meet the expectations of the adults in their world, will eventually stop caring. They see themselves as failures, and are no longer interested in realizing the many academic and behavioral goals that we have set out for them.
If there is one positive lesson that we can learn from the greedy corporate executives at AIG, it is the correlation between positive association, self esteem and personal conduct. When people take pride in what they do, they tend to act more scrupulously and with greater integrity. When, however, people lack that sense of pride, when they feel that there are doomed to failure regardless of the effort that they invest in a project, they will quickly lose heart, and become less concerned about their general conduct.

This same lesson applies equally to our children. If we are to reduce the degree of insolence amongst our children, we must find ways to develop and nurture their sense of personal esteem and ability to accomplish. Only then will they be truly motivated to accept the importance of their actions, for themselves as well as for others.

Rabbi Naphtali Hoff (hoff@htc.edu) is Associate Principal at Yeshiva Shearis Yisroel/Veitzener Cheder and an instructor at Hebrew Theological College in Chicago, IL. For more information about Rabbi Hoff, visit his website, www.rabbihoff.com.

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  1. The AIG debacle is only an indication of how little the Obama administration understands finance and the financial industry. The ‘bonusses’ are not bonusses at all in the sense of an arbitrary reward for performance. In fact they are contracts with expert, knowledgeable salespeople who are given a precentage of the profits. Indeed there were profits at AIG or else the company would be in worse shape than it is. Should those people who worked hard for the company’s success be penalized because our inept government can’t understand what they do? In addition to that injustice, these valuable people whose skills are much in demand will move to a company that will pay them what they are worth, leaving AIG with no skilled people to get it out of its mess. The government’s investment will remain unpaid as AIG finally flounders and dies.