Kenneth Feinberg Explains the Art of Compensation

Watch the full video of this session

"It's not rocket science, it's a judgment," Kenneth Feinberg said of his new role as the victims compensation czar for the BP oil spill. The special appointee said he's more likely to award money to families and businesses closer to the oil spill.

In the last decade, Feinberg has served as something like the U.S. government's secretary of fairness. He managed the 9/11 Victims Fund, serves as the "pay czar" for banks receiving TARP funds, and recently tapped to administer the victims compensation fund for the Gulf oil spill.

The controversial 9/11 fund, which awarded more money to the families of rich bankers than firemen, was a defensible bill, he said. But it was also a "unique response to an unprecedented moment" that "will never be replicated," he told Walter Isaacson, the CEO of the Aspen Institute, at the Washington Ideas Forum.



If he, and not Congress, had designed the fund's rules, "I would have said, 'Don't tie compensation to the court system in 9/11. Don't fuel divisiveness. Pay everybody the same.' But that's not what Congress said in that statute."
Washington Ideas Forum
The United States created a victims fund after 9/11, but not after the Oklahoma City bombing or the first World Trade Center bombing. That's because, said Feinberg, Americans saw 9/11 as special. "We wanted to show our support for the victims of 9/11. From the perspective of American society," he said. "I can see the justification."

Feinberg explained why certain parties do, and don't, receive compensation from the Gulf oil spill fund. A restaurant hundreds of miles from the Gulf? "You can get shrimp elsewhere," he said. An in-land strip joint? "Not associated with the Gulf's affected industries." But a Beloxi shoemaker serving fishermen whose main source of revenue is now streaked with oil? "I'm inclined to pay that client."



More often than not, deserving claimants who don't get money have simply failed to document their losses. "I've paid 50,000 claims worth about a billion dollars", Feinberg said. But he's sitting on about 25,000 claims without proper paperwork. Without a documented loss, he said, there's no way to critically appraise the claim.

Isaacson called his interviewee the "greatest applied moral philosopher we have in America." Feinberg declined Isaacson's request to list his favorite moral philosophers, but he managed to state his own moral philosophy. "Your job is to try to apply the concept of fairness. I do the best I can in applying fairness. Everybody counts everybody else's money. It's very important to achieve relative consistency."

Full session below

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Politics

Just In