Tag Archives: gall

Defining Chutzpah

Chutzpah is a yiddish term that roughly translates as “gall” or “nerve.” Borscht belt comedians have historically illustrated its meaning with the following example: a young man kills his parents and then throws himself on the mercy of the court because he’s an orphan.

The young man in that story looks almost reasonable in comparison with AIG–or more accurately, in comparison with AIG’s former CEO, Maurice Greenberg. Greenberg may go down in history as the ultimate example of chutzpah. As Politico noted, in an introduction to their report,

Remember when AIG took a $182 billion bailout only to turn around and hand out seven-figure bonuses to the same guys who tanked their company? Grab the pitchforks — it gets better.

Politico was talking about the fact that AIG’s current board was meeting to consider whether the company should join a lawsuit brought by Greeenberg and former shareholders of the insurance giant. The suit centers on an allegation that the terms of the bailout that saved the company were unfairly onerous.

Think about that for a minute.

In fact, let’s do a thought experiment. Let’s say your brother-in-law came to you with a problem; thanks to his own greed and all-too-clever business dealings, his company was on the verge of ruin. Assume he begged for your help–a loan to get him out of the dicey situation he had created. You wouldn’t have given him the loan, but you knew that if you allowed him to go under, other family members–most of whom were innocent of any participation in his folly–would lose money they’d invested in his business. Some would lose their life savings. Your nephews would have to drop out of college, your sister-in-law who had cancer would lose her health insurance…The consequences of his stupidity and venality would be horrible.

So you grudgingly agree. You tell him that you’ll lend him the money, but only on condition that he repay it with interest at an above-market rate and subject to other terms you hope will protect you and his company against further profligate behaviors. He eagerly agrees, since he knows no one else would lend him the money and the higher rate is justified by the greater risk involved. Deal.

Immediately after he gets the money, he takes his management team on an extravagant cruise. And then, when the business stabilizes, he sues you, alleging that the terms of your loan were unfair.

See what Politico meant by the pitchforks reference?

I don’t blame AIG’s current board for going through the motions of deciding whether to join this jaw-dropping lawsuit. They have an obligation to their shareholders to actively consider even bizarre claims, and they decided–quite prudently–against it. But the audacity of the Greenberg lawsuit–the staggering sense of entitlement it displays–is absolutely overwhelming.

It easily displaces other examples of chutzpah. In fact, it may be the most apt definition of the word yet encountered.

It makes me want to ask that famous question: have you no shame, sir?