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March 23, 2009

AIG: A Helpful Summary of the Faux-Outrage


If you’re not closely following the AIG bonuses hullabaloo, it has probably gotten too confusing due to the rhetoric and feigned outrage that has been emanating from Congress. But the situation is actually quite simple, and here are the bare facts to help you catch up.


Fact: The nearly $800 billion so-called “stimulus” written, debated and passed by the Democrats in February, with help from exactly zero House Republicans and three Senate Republicans, contained language explicitly eliminating limits on bonus payments at companies receiving federal funds, including AIG.


Fact: In reliance upon this legislation, AIG paid $165 million in bonuses to its employees.


Fact: When the story hit the news pages, and $165 million sounded like too much to some, the same Democrats who had unambiguously told AIG it could pay the bonuses suddenly decided to take a principled stance against their February selves. Now, in front of every camera they can find, they are valiantly trying to take the money back from the employees who had contracted for this compensation with AIG.


These are the facts. Putting aside any value judgment on the bonuses themselves, the Democrats specifically and willingly made this situation possible. Both chambers of Congress passed this legislation, and Barack Obama proudly signed it, with near-unanimous opposition from Republicans. The Democrats are fully responsible for it.


Yet they are trying to cast the blame elsewhere. Obama, Harry Reid and Nancy Pelosi would instantly exploit each opportunity to score political points – even if it comes at the expense of the Obama, Reid and Pelosi from the previous month. So upon hearing that they themselves had told AIG to pay unlimited bonuses, they exploded into extraordinary faux-rage.


Notice how nothing changed between February and March, except that the American people now understand the legislation passed by the Democrats. Yet that’s enough for Obama and his Congress to fake opposition to it. After all, it’s not like AIG’s routine move was a surprise. Everyone knows that companies pay bonuses. And whether or not bonuses help such companies succeed, the fact is that the Democrats knew it was going to happen, and even went out of their way to give AIG the green light for it.


The feigned outrage has resulted in an unnecessary circus. During the made-for-TV grilling of AIG’s CEO, Democratic Congressman Gary Ackerman declared: “(You have) have access to $197,300,000,000 of U.S. taxpayer money - $165 million adds up (as) less than one-tenth of 1 percent. That’s not worth the aggravation, the angst that you have suffered and that this country is going through.”


Ironically, Ackerman’s argument best applies to him and the entire United States Congress. They are preoccupied with a comparatively infinitesimal issue that, aside from its political value to re-election ambitions, is absolutely not worth the effort. Economist Greg Mankiw calculated (admittedly crudely) that considering the size of the bonuses, congressmen should spend a grand total of one minute on the issue. Notwithstanding the logic of such a proposition, the Democrats know they have been spending their country into bankruptcy, and the bonus debacle is a distractive opportunity from liberal heaven.


They are loving the spotlight because it gives them a semblance of fiscal responsibility. Fiscal responsibility, that is, from the politicians who have supported massive bailouts, rammed through an $800 billion wasteful pork project and now speak not of millions or billions, but trillions. It’s fiscal responsibility from the administration that is on a streak of nominating tax cheats to the highest offices of government, including the Treasury, which is in charge of . . . collecting taxes.


And now the Democrats want to make up for their (never-admitted) mistakes by taking the money back from individual employees and their families, by force if necessary. Obama’s teleprompter boldly castigated AIG: “This isn’t just a matter of dollars and cents. It’s about our fundamental values.” It is unclear which “fundamental values” the teleprompter was referring to, but it most certainly cannot be the honoring of contracts between companies and their employees. Rather, Obama’s “fundamental values” seem to be whichever ones score highest on the respective week’s Gallup poll.


Congressional Democrats have gone so far as demanding the names of bonus recipients, despite the death threats that have been pouring in at AIG (one can only wonder how those got stirred up). One day, you’re an employee who received compensation that you contracted for and planned around, and the next day, your elected representatives are fighting to make your family the target of death threats.


The House has also passed a 90 percent tax on the bonuses, which, combined with some state taxes, amounts to a nearly 101 percent tax on those bonuses. In America, we have begun using taxation as punishment. Republican Congressman John Campbell wrote in opposition, “If we go down this road, the government can impose a 100 percent tax on anyone they don’t like, or anyone they believe is paid too much.”


We are going down this road. And we have hope ‘n’ change to thank for it.


© 2009 North Star Writers Group. May not be republished without permission.


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