Economics

The Grassley Center for Seppuku Studies

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It's getting dangerous for financial executives to go out on the street. People on the street want blood and U.S. senators want disembowelment. Well…sorta.

From Sen. Charles Grassley (R-Iowa) at a Cedar Rapids radio station yesterday:

…I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide.

And in the case of the Japanese, they usually commit suicide before they make any apology.

Obviously, the honorable senator from Iowa clarified his statement via a spokesman. But legal scholar Jonathan Turley gets in a great "Ohhh Snap!" on his blog:

Grassley suggested that AIG executives do the honorable thing and commit Seppuku. The problem is of course that ten of his colleagues immediately demanded $10 billion for the study of Seppuku techniques and the creation of Seppuku centers as part of the proposed second bailout bill.

After the zinger, though, Turley gets to point:

Of course all of the outrage on the Hill is meant to distract attention from the fact that members and the White House did not care enough to properly structure the bailout to bar such payments. Instead, as is often the case, they rushed to spend hundreds of billions of dollars without proper time or preparation on the details like an economic Patriot Act debacle.

Ok, so the second comment doesn't sound as cool. But neither does an explaination from Grassley on why he voted for bailouts in the first place.

Feeling a little upset about the bailouts and bonuses? Well, relax and watch this great clip from Kobayashi's 1962 hit Seppuku:

NEXT: Read it and Retch: George W. Bush's Complete Spending Record

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  1. It’s pretty hypocritical of Grassley to criticize executives for using TARP money for bonuses. When he votes on farm bills & collects farm subsidies.

    http://www.usatoday.com/news/washington/2007-11-05-farmbill_N.htm

  2. And in the case of the Japanese, they usually commit suicide before they make any apology.

    Err, not really. Seppuku was often committed after apologizing to one’s lord.

    Of course all of the outrage on the Hill is meant to distract attention from the fact that members and the White House did not care enough to properly structure the bailout to bar such payments.

    I disagree. This is a distraction from the increasing realization AIG is merely a conduit, that the bailout money is going not into AIG’s coffers, but is being passed through by AIG to counterparties on failed derivatives, and that many of these counterparties are foreign banks and trading firms.

    Congress and the administration are desperately hoping that an increasingly pissed-off American taxpayer never figures out that they aren’t bailing out American companies, which is bad enough, but foreign financial institutions.

  3. For once I concur with Senator Corn. Mass suicide would be great, but I’d settle for a public outing of those executive fat-cats who underwrote all those credit default swaps. Publish their names. Print their addresses. Post pictures of their swank mansions. Shame them. Prosecute those who participated in outright fraud. Put the fear of the guillotine in them. If Americans can’t get pissed off at something like this, we’re doomed.

  4. I think a little seppuku might be good for corporate executives. . .and politicians. I’d be willing to foot the bill for a tant? or two. Forget suicide–what ever happened to the slightest amount of accountability?

    I’m not thrilled about where any of this money is going–the bailout was a stupid idea from day one–but how is this not the government’s fault? The companies are going to spend the money the way they were spending the money. If executive compensation is too high, well, that’s a problem within the system that isn’t any of the government’s business, anyway. But it’s a drop in the bucket to the billions of gallons that are pouring out.

  5. If suicide were the price for really, really bad decisions, for greed and stupidity and partisan short-sightedness, then there would be very few survivors of either party in Congress or the assorted state legislatures.

  6. I would suggest the first thing that would make me feel a little bit better toward them if they’d follow the Japanese example and come before the American people and take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide

    You first, Grassley, you hypocritical fuck. Set an example.

  7. I think a little seppuku might be good for corporate executives

    Do not think so small. All fo the Capitalists should try it at least once.

  8. May this one humbly suggest that the seppuku sentence be expanded to include the financial media and many of our government leaders?

  9. Wouldn’t we get more satisfaction if we just bludgeoned the politicians with dull instruments for a couple days and shoved them off a cliff together, like into one of those holes that look bottomless.? I think that would exceed all Pay-per-view records by a wide margin. Then we just take the money back from the corporate executives after a swift kick to the nuts.

    I mean the punishment should fit the crime.

  10. Nick,

    The Recorder is the dullest instrument of them all. Wouldn’t that process take a long time and be as damaging to the bludgeoner as the bludgeoned?

  11. Why shouldn’t AIG take taxpayer money and distribute it to it’s employees? Obama is unilaterally restructuring contracts in favor of his his constituency! If there aren’t any hard and fast rules anymore, he should be prepared for others not to feel obligated to play by them.

  12. I, for one, would like to see a lot more seppuku among our political leaders.

  13. the punishment should fit the crime

    Alrighty. Chop off one thumb from those nitwits who bought 10 times the house they could afford, and a nose and an ear lopped off from the sleazebag, fly-by-night loan company greaseballs who conned the feeble-minded into signing the papers. Castration for those shiny-suit douchebags who invented incomprehensible derivatives. Gas chamber for the top executives.

  14. AIG is merely a conduit, that the bailout money is going not into AIG’s coffers, but is being passed through by AIG to counterparties on failed derivatives, and that many of these counterparties are foreign banks and trading firms.

    Call me what you will, but the fact that the money goes to “foreigners” makes not one bit of difference to me.

    I am no more outraged by the idea that these bets are being paid to the Gnomes of Zurich than I am that they are being paid to Goldman Sachs (which is plenty fucking outraged).

  15. Call me what you will, but the fact that the money goes to “foreigners” makes not one bit of difference to me.

    I’m with you, but the rabble cares. If the rabble gets frothy at the mouth over this, the chances of another round of bailouts decreases.

  16. As has been pointed out by numerous others, if AIG had been declared insolvent, and allowed to file for bankruptcy, the recipients of those “retention bonuses” would be in line with all the other unsecured creditors, trying to get a few cents on the dollar for their contractually obligated loot.

  17. The Congress Reps who voted for the bailout were too lazy to put strings on it. Now they are upset at how AIG is spending the money. Tough. The politicians who voted for the bailout should resign and appologies to the American people for their incompetence.

  18. but I’d settle for a public outing of those executive fat-cats who underwrote all those credit default swaps. Publish their names. Print their addresses

    Yeah, right. I bet you loved it when those CDSs were helping your retirement portfolio to the tune of 8-10% growth a year.

  19. “Why shouldn’t AIG take taxpayer money and distribute it to it’s employees? Obama is unilaterally restructuring contracts in favor of his his constituency! If there aren’t any hard and fast rules anymore, he should be prepared for others not to feel obligated to play by them.”

    The big news of the day is the AIG bonuses. Barack Obama, obviously worried about getting on the wrong side of the bailout backlash, berated AIG and directed Tim Geithner to do what he can to block their payment.

    Republicans weighed in too; John Boehner called the bonuses “outrageous” and demanded an “exit strategy” from AIG. The company, meanwhile, says it is contractually obligated to pay the bonuses and has no choice.

    It strikes me that this episode illustrates the inherent evils of a bailout. There really are no rules; the government pumped many billions into AIG, but the company and its new “owners,” the taxpayers, are making it up as they go along. AIG is likely right in saying it is obligated to pay the bonuses, but the public is also right in believing a bailout shouldn’t work this way. The problem is that we have no established rules to govern bailouts.

    Which is one basic reason why bankruptcy is far preferable. Bankruptcy has reasonably clear rules that have been developed over many years. The bankrupt company is run for the benefit of its creditors, or, if appropriate, shut down. The creditors decide whether to keep existing management on. Executory contracts can be accepted or rejected; labor and supply agreements can be renegotiated. A judge presides so that disputes can be fairly resolved.

    A bailout is an ill-defined procedure in which no one’s rights are clear, and political calculation counts for more than fairness or transparency. The flap over AIG bonuses is just one of many that we can expect to arise if we continue down the path of endless bailouts, rather than allowing insolvent companies and their creditors and investors to pay the price of that insolvency.

  20. Call me what you will, but the fact that the money goes to “foreigners” makes not one bit of difference to me.

    Me neither, really, but it really ramps up the potential for voter revolt if/when this becomes common knowledge.

  21. jtuf,

    I’m in. What bullshit to complain about it after the fact, when there’s jack they can do about it. How typical of Congress and the president to not take accountability for anything that they do.

  22. Everyone in Congress who voted for either bailout package should commit seppuku on Pay-per-view TV, and use the funds to replace tax revenues.

  23. I don’t know if the video clip gives enough context, but the guy there is forced to commit seppukku with a bamboo blade, which is why it looks a lot tougher than your ordinary seppukku.

  24. I hate to get away from the main issue here, and I know it was total hyperbole, but I find it annoying that the Republican senator (who probably justifies all kinds of stupid positions on the basis of “valuing life”) would advocate suicide over financial matters and deny ordinary citizens suffering from devestating illnesses the right to seek out assistance for ending their own lives with dignity.

    Sorry for that rant/aside.

  25. Wait, I have a thought. Congress should pass an unconstitutional bill taxing the AIG bonuses at 100%. What a great idea!

  26. R C Dean,
    The trick is to direct the anger of the populace at one’s opponents and hope that their thirst for blood is sated by the time they realize the hand the demagogue had in it.

  27. At least Satan was upfront about the signing in blood and giving up our immortal souls.

  28. Pro Libertate,
    Nothing is unconstitutional. One merely needs to be flexible in its interpretation.

  29. Besides, time is fluid, and all things really take place at once, so the concept of “ex post facto” is meaningless.

  30. “If the rabble gets frothy at the mouth over this, the chances of another round of bailouts decreases.”

    No, it just means that they’ll want their bailout to be bigger.

  31. If it was available, Jeff, you should have shown the clip where Tatsuya Nakadai’s character tosses the topknots of the three samurai (who had called in “sick”) before the chamberlain.

    Mainly because he exposes the hypocracy of the supposed martial valor of the samurai the same way Turley exposes the supposed fiscal restraint of Grassley, et al.

    Great movie, btw. Just (re)watched Kobayashi’s Samurai Rebellion the other night.

  32. Also, for those who don’t know, the reason the samurai in the clip is having trouble is that he’s trying to kill himself with a bamboo sword.

  33. @AIG

    At least Satan was upfront about the signing in blood and giving up our immortal souls.

    What souls?

  34. Wait, I have a thought. Congress should pass an unconstitutional bill taxing the AIG bonuses at 100%. What a great idea!

    Have you been talking to Senator Dodd?

  35. @Smartass Sob
    You didn’t know us until after we sold our souls.

  36. Why stop at taxing 100% Of AIG bonuses? We should tax 100% of all private income.

  37. We are a long way from feudal Japan, but it does seem like ritual self-disembowelment should be equally outrageous as taking million-dollar bonuses after a failure such as AIG’s.

    But it’s a moot point – if seppuku was a option in our culture, no doubt the AIG wizards would have sold “Honor Default Swaps” which would pay upon their deaths via ritual suicide. Since hedge funds and investment banks would undoubtedly hold billions of dollars of these, the execs would be off the hook.

  38. if seppuku was a option in our culture, no doubt the AIG wizards would have sold “Honor Default Swaps” which would pay upon their deaths via ritual suicide. Since hedge funds and investment banks would undoubtedly hold billions of dollars of these, the execs would be off the hook.

    No way. It’d be outsourced to China. Buy a seppuku insurance policy from some Chinese company, and the Chinese have a political prisoner commit seppuku instead of you. You could commit seppuku several times if you felt really really bad about what you did.

  39. They are outsourcing seppuku now? These evil corporations must be stopped!

  40. In old Japan, a samurai’s seppuku insurance was his kaishakunin–i.e., a buddy who would stop the suffering of a stomach cut by chopping off his head.

  41. PL,

    Don’t give them any more outsourcing ideas! All it serves is to weaken the O’bama plan to save the world.

  42. Seppuku… Any iPhone users know if there is an app for that?

  43. Thousands of executives found dead at the bottom of a ravine known as “Galt’s Gulch.” Details at 11.

  44. Posted this in the wrong thread. Let’s try again:

    iSeppuku. New. Trendy. Functional.

  45. In the case of the Japanese, you know, they do one of two things. They either go commit suicide or they take a deep bow and say apologies and then sometimes resign. But they take full responsibility. And we’re not hearing that.”

    Where in that statement does he advocate the suicide of the exectutives? I don’t see it. He is using a rhtorical device of presenting one rediculous option along with the option that he really wants to see happen. In this case, the rediculous option is suicide, the desired option is the executives resigning, taking responsibility and apologizing.

    Considering many in the media’s (Megan McCardle to name one) coverage of the Wall Street debacle, someone on Wall Street being held responsible for something and being fired is no doubt a more shocking and repugnant concept to them than even suicide.

  46. Wait, I have a thought. Congress should pass an unconstitutional bill taxing the AIG bonuses at 100%. What a great idea!

    Have you been talking to Senator Dodd?

    It’s Senator Max Baucus, and the tax is only 91%.

    http://money.cnn.com/news/newsfeeds/articles/djf500/200903171329DOWJONESDJONLINE000543_FORTUNE5.htm

  47. Is this what is meant by risk v. return?

  48. Couldn’t follow what was happening in that video, so looked it up. Here’s the plot I think. The young fellow who kills himself is a destitute samurai who goes to some feudal lord and offers to commit seppuku if they will not give him a small cash payment. A common occurrence at the time, apparently. This lord, being a prick, calls him on this offer. The samurai, unlike most, is actually sincere in his offer and being an honorable man resolves to commit seppuku. Unfortunately he has earlier sold his sharp steel dagger for a blunt bamboo one, and the results are what you see in this video. The main part of the movie focuses on the samurai’s father-in-law’s revenge against this lord.

  49. CSI – between you and I, we should have put in a SPOILER ALERT warning somewhere.

  50. John, you’ve got a different quote than the one above, which clearly invites the offending executives to kill themselves:

    I would suggest the first thing that would make me feel a little bit better toward them if they’d follow the Japanese example and come before the American people and take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide.

  51. I wonder if he meant regular suicide or the kind that involved flying your plane into a ship? Americans sometimes get confused about that.

  52. Outstanding fucking movie. I’d feel better if Congress was in session less and watching films like this one more–and The Human Condition trilogy.

  53. And Samurai Rebellion, not to mention Kwaidan. Kobayashi was one of the world’s great directors who went through a period when he could do no wrong.

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