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March 23, 2009
AIG: A Helpful Summary
of the Faux-Outrage
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.
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.
In reliance upon this legislation, AIG paid $165 million in bonuses to
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
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
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 . . .
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.”
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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