Recently, much attention has been paid to the travel destinations of banks and insurance companies. Call it the "AIG effect." CEOs were grilled over off-site meetings held at the beach or the casino that were supposedly financed with taxpayer dollars. Now the era of such extravagant travel has come to an end. Never mind the fact that hotels in Las Vegas and Hawaii are laying employees off because so many companies have cancelled their visits.
Surprisingly, the Federal Reserve didn't get the memo that these types of trips were no longer acceptable. Ben Bernanke is sponsoring and attending a posh off-site meeting in May, 2009 at Jekyll Island, Georgia to discuss financial crises and innovation. They are also footing the travel and lodging bills for many of the participants who work in the industry. No one can argue that this conference is extremely relevant, but why is the Fed hosting it at an island retreat? Is there really no cheaper option? The vast majority of attendees are probably coming from in New York and DC - was there no conference space available in either of these cities? Why can't the Fed's guests pay their own way?
The lesson: If a company wants to reward top perfoming employees with a trip to the beach, they should be drawn and quartered. But if the government wants to host a party for its friends, they just get out their checkbooks (and keep the party out of the media spotlight).
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