When you watch the early scenes from the documentary The Queen of Versailles, (and if you haven't seen it, do so—it's terrific), you think you know who the villains are. There's David Siegel, the megalomaniac greedhead owner of a massive time-share company, a man who is building the nation's largest home and outfitting it to look like the palace occupied by a royal couple so despised they were beheaded by their countrymen. Then there's Siegel's much younger wife, Jacqueline, who brings a new meaning to the word "acquisitive" and who seems utterly clueless about how the other 99.9 percent live (the scene of her at the Hertz car rental counter asking what the name of her driver will be is a classic).
But what's great about the film is that no matter how odious the couple is (David Siegel has since worsened his image by telling employees he'd have to fire a bunch of them if Mitt Romney was not elected), there's actually an entity that is more despicable. And that is the banks and financial services industry, whose short-sightedness, recklessness, and greed make the Siegels look like small-time players. In one of the few sympathetic lines Siegel utters in the film, he observes that the banks don't really want businesses to succeed, even if it means they'll get their entire loans paid in full. They just want to take over the property, even at a loss.
That mindset explains the appalling greed and sense of entitlement displayed by Maurice "Hank"' Greenberg, former chief executive of the insurance firm AIG. The company made a lot of bad and risky investments and was on the verge of implosion. It got bailed out by the U.S. taxpayer, on the theory that AIG's demise would have collateral damage extending far beyond the perpetrators of the mismanagement. It worked, all the way around: AIG stayed in business, the company paid back the U.S. government, and taxpayers made a $22.7 billion profit. In other words, the federal government did a better job at being capitalists and investors than AIG did.
Nor did AIG's management suffer—even after the bailout, executives received fat bonuses and went on a spa retreat. But Greenberg is now mad about it, and is suing the federal government for $25 billion for shareholders, saying the terms of the bailout agreement were unfair. AIG itself, wisely, opted not to join the lawsuit after flirting with the idea for a day and enduring the obvious embarrassment and backlash.
The audacity behind Greenberg's reasoning is stunning. His sense of entitlement dwarfs anything we have heard from the Siegels. AIG took bad risks and lost. That's the nature of business and capitalism. The federal government took on a troubled company, helped it get back on its feet, and was rewarded with a profit—money that goes into general revenue. The Treasury Department staff didn't get spa vacations or big bonuses. They did their job, and did it better than Greenberg and his fellow executives did. And Greenberg thinks that's unfair? That's a remarkable perspective from any businessperson, particularly one from a business like insurance, which is rooted in risk assessment. The suit should be laughed out of court. And Greenberg should take some of his leftover compensation and buy a paper bag to put over his face.