Can you believe what happened with the AIG bonuses!?!?!?
I am sorry, but I find this situation absolutely unacceptable!
A bunch of greedy people, taking money that they did not earn for no other reason other than they could!
Oh… did you think I was talking about the people at AIG?
Wrong!!!
I am talking about Nancy Pelosi and her flock of like-minded conformists in Congress.
Over the past couple of weeks, everyone from members of Congress, the Treasury Department up through the White House have expressed their “shock”, “disgust” and “outrage” over the bonuses AIG executives recently received.
My question is, why are they outraged?
They are the ones that agreed to, and approved, these bonuses…then later tried to lie about their involvement. In fact, they only became “outraged” over this after the bonus plan was leaked to the media. What a great example of how bankrupt in ideology these people are.
Take Treasury Secretary Timothy Geithner. He claimed he only found out about the bonuses on March 10 of this year, yet he was discussing the bonuses with Congressman Joe Crowley on March 3. Even if he got the dates mixed up, these bonuses have been agreed upon for months.
Chris Dodd, one of the earliest and most outspoken critics of AIG’s bonuses, claimed for days that he was unaware that the bonuses were included in the plan. Then he did an about face and admitted that, not only did he know the bonuses were part of the negotiated deal with AIG, but it was him who inserted the language approving the bonuses into the document!!!
Whether you agree with the bonuses or not is another debate. What cannot be debated is that the government reneged on the deal, plain and simple.
Since Congress has been caught red-handed, their only recourse is to tax the hell out of these bonuses…90% as the Pelosi plan outlines.
This is hardly justice…in fact it is highly unconstitutional.
Taxation is deemed Constitutional because, in theory, what one pays into the government takes back in services provided by the government (i.e. protection from the military, Medicaid, etc.).
That is not happening here.
These people are not receiving any additional services from the government after they have been taxed through the nose. They are arbitrarily being singled out and for what? There is certainly no policy reason behind it.
It is being done to quash popular outrage…not over the actions of the people of AIG, but rather the actions of Congress.
So that means that the government can arbitrarily hammer people with high taxation any time there is popular outrage over some deed or issue. That is a pretty frightening reality.
There is a bigger problem that this latest spectacle exposes about what is really going on in the economy as well.
We are constantly hearing that the Fed is pumping billions and billions of dollars into the economy to unfreeze credit and get people lending again.
Well, if anyone had not noticed, liquidity is not the problem. There is more than enough money in the markets to revitalize the economy, it is just that a number of large financial institutions are merely sitting on it right now.
Why is that?
Well, they are scarred to death that if they come to any agreement to lend money or purchase assets, the government is going to come in, renege on the deals and impose unknown fees, regulation and punishment. After all, if it can happen to AIG, it can happen to anyone. This fear is paralyzing the markets as the Treasury Department and the Obama White House have become loose cannons when dealing with the economy.
I am also outraged at the depiction and the treatment of the workers at AIG for taking these “bonuses”. I put “bonuses” in “” because they are not really a bonus like most people understand them to be. They are standard parts of most financial executive’s compensation plans. A number of these “greedy” executives, agreed to work for an annual salary of $1, with the understanding that they would receive these bonuses.
As AIG chief Ed Liddy explained on the Hill last week, the people receiving retention bonuses were not the same people who launched AIG's unhedged housing bets that brought the company down.
Those people are gone.
Yet, you have people like Congressman Barney Frank and New York Attorney General Andrew Cuomo treating these AIG executives as if they were criminals. As Holman Jenkins of the Wall Street Journal pointed out, Cuomo even went so far as to threaten those that do not pay the money back (money they are contractually entitled to) that he would publish their names.
It is this thuggish, bullying attitude that will continue to incapacitate the market and make scapegoats out of innocent people.
So, in closing, if you are outraged over these bonuses, please be sure to direct your anger properly towards the members of Congress, not the AIG employees. They are the ones that are truly responsible for these bonuses.
That’s all for now folks. Until next time, take care and be well.
-John
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