Political Update

1. Ed Liddy is Quitting.

Big surprise after the reception he received on Capitol Hill a few weeks ago. Those Congressmen, strutting, posing and wagging their fingers for the cameras, treated this accomplished businessman as if he created the problems at AIG. To the contrary. Ed Liddy graciously accepted the position of CEO of AIG at the request of the Treasury Department well after the bailouts started. Not only that, but this principled man said he would take the job, but on the condition that he be paid $1 per year to do it. And, by all accounts, he was doing a fabulous job winding down the costly positions and selling assets.

Remember, we taxpayers own 85% of AIG. And, we want the best people to help us run this company or we'll never get paid back the $180 BILLION we have extended to them (or any part of it). So, will someone please help explain how we are going to attract talented business leaders to come to this company when they saw Ed Liddy (at $1 a year) get that kind of treatment?

What planet are these people in Washington living on?

2. Trial Lawyers LOVE Obama.

They absolutely adore him. Trial lawyers will be building their next set of mansions, paying college tuition and buying new Rolls Royces for years to come because of our young President's decisions in his first few months in office. Let's take this week's news that, by executive order, President Obama directed the Federal Government to undo possibly the most constructive thing the Bush Administration did. Which was, to try to coordinate product liability issues at the Federal level, rather than force companies to attempt to follow 50 different sets of state rules.

The Bush Administration, for all its faults, did understand business needs better than Obama has so far shown. And, why is it important to understand business needs when it is the "little guy" who really needs protecting? Because in this case, you need to look a little deeper to see who really benefits from this sweeping change of the law. It ain't the little guy. It is the trial lawyers who have been stymied by this, and other regulatory changes over the past 10 years. The trial lawyers stand to benefit immensely because it is now OPEN SEASON on companies who make products for the U.S. economy. Instead of one set of rules, now there are 51 (50 states plus one federal). And, these rules are in constant motion. This has a debilitating impact on companies' ability to plan. And, if you can't plan your business, you don't spend money expanding it. Because your return on investment is cloudy, at best. So, you don't buy machinery or hire people. It really isn't any more complicated than that.

Why does all this matter? It only matters if you think that growing the economy and creating jobs is important. If you don't, then it doesn't matter. And, I don't buy for a second that this is a tradeoff between a system that wasn't working before (prove it) and now we will have regulatory nirvana by having 51 sets of rules. There was no identifiable problem, except from the viewpoint of trial lawyers, who really did not like the cap on their compensation.

Woldy