AIG Bonuses: It May be Time for a Tea Party
As an employee of the company that gave them I of course have several thoughts on AIG's bonus payments. I understand people's angst, but think the angst is really channeled in the wrong direction. Every company has exempt and non-exempt part time, full time employees and contract employees. The government gave us the money to keep doing business, paying our contractual obligations is part of that business. I think we had the legal right the pay them. As a matter of fact a provision in the stimulus bill specifically authorized AIG pay these bonuses. Other company's such as Fannie Mae and Freddie Mac have used stimulus money for huge bonuses. No one has said a word about them because they are GSE's and the money is going back into the hands of the politicians. Failure to pay our contractual obligations would have forced the company into bankruptcy, and the purpose of the government money was to prevent that from occurring. Remember AIG was "too big too fail." These bonuses as distasteful as they are prevented the company from failing. Too not pay them would have been the misuse of the funds.
Lets put the bonuses in perspective. AIG has received over 100 billion dollars in stimulus or TARP funds. 165 million dollars in bonuses is a little more than 1% of what they have recieved. These bonuses were a minuscule portion of what we had been allocated. We took a very small part of the dollars we were given and used them to do what we were charged to do, and that was avoid the pain bankruptcy of the largest insurance and financial services institution in the world would have brought to the world economy. I did not like the idea from the beginning but that is what we were charged by Congress to do, and that is what we did.
I believe the bonuses should be paid because it is unconstitutional to confiscate duly earned wealth with an ex post fact o law. Whether you like the way they were earned or not, they were earned, legally. For the government to decide that because the legal action of a group of people is unpopular, they can confiscate their wealth is a dangerous precedent. (It reminds one of Warsaw in 1939) Who is next group of people that will be done to? Whose to say that someone who promulgates an unpopular idea will not have their wealth confiscated because their ideas are unpopular or politically incorrect. The argument that the bonuses should not be given because they reward failure is ludicrous. Rewarding failure was the purpose of TARP and the stimulus. The money was given so incompetent nincompoops would not have to fail and innocent people would not have to suffer for their failure. Rewarding failure and giving money to people who did not earn it and do not deserve it is what the sub-prime mortgages are all about, and is what this administration is about. They have appointed a Secretary of the Treasury who does not pay his own taxes, and blames his tax problems on Turb0-tax. It is about entitlement. Denying the bonuses is contrary to everything the stimulus and TARP monies were given to do. It is duplicityl.
Then what are people upset about? This is one of those media driven issues. Okay I agree it wasn't the best decision for public relations for AIG to pay the bonuses. AIG probably should have denied the payment and taken their lumps. However, if they had done that and gone bankrupt despite the injection of $100 billion from the government. What do you suppose would have happened?
Do you think Mr. Liddy would have been called before Congress and excoriated for misusing and mismanaging the stimulus funds? Do you think the Attorney General of New York would have subpoenaed records to see who misused the funds? Do you think any Congressman would have taken an iota responsibility for the absolutely ridiculous idea of bailing out AIG?
There is a lesson to learn from this: 0nce a business submits to government control it is destined to fail. Because governments do not exist to make people lives easier and they certainly do not know how to make a profit. (Amtrak and the U.S Postal service are examples) Governments exists to control. President Ronald Reagan used to say the eight words a small business man dreaded to hear were, "I'm from the government; I'm here to help." Well I think I know one large business that is beginning to feel that way. Government Help: now there is an oxymoron.
So why the hoopla? Why is the media concentrating on this and not the banks AIG gave money to in Europe or Fannie Mae or Freddie Mac? I will tell you why: demonizing AIG takes the focus off the real culprits, Congress and the President, who created this mess, authorized the budget and now want us to see them as our benevolent protector. And where is the Republican party in all this?
A colleague at work asked me why I thought several Republicans voted to confiscate the bonuses rather than to stand on good law and principle. I said because as politicians they did not have the guts to make an unpopular vote, because it was the right thing to do. Many politicians today govern by the polls not by principle. That is what this is about. Are we going to be a government that is built on virtue, principle and law or is every wave of public opinion going to dictate policy?
The right thing for AIG to do is to hold their noses, pay the bonuses, get rid of the numskulls who got us into this mess. Then quickly divest themselves of government money. The right thing for Congress to do is to say to the American people, "Both parties have failed you for last 20 years. We have governed based on what was popular rather than on what was right. We have rewarded failure and incompetence and created a victimized, dysfunctional society. It stops here! it stops now! We can do something different. We can have hope again we can have change. Yes we can."
Former British Prime Minister Margaret Thatcher said, " The problem with socialism is that government eventually run out of every body else's money." Well Mrs. Thatcher I have good news for the socialists. The 111th Congress of the United States and this administration has figured out a way to overcome the greatest weakness of socialism. When they run out of every body's money, when they have taxed us beyond our limit, they will just borrow or print some more. As Senator John McCain has said, this is generational theft; it is government sanctioned abuse. I think the correct term is "tyranny." It may be time for a tea party!
Lets put the bonuses in perspective. AIG has received over 100 billion dollars in stimulus or TARP funds. 165 million dollars in bonuses is a little more than 1% of what they have recieved. These bonuses were a minuscule portion of what we had been allocated. We took a very small part of the dollars we were given and used them to do what we were charged to do, and that was avoid the pain bankruptcy of the largest insurance and financial services institution in the world would have brought to the world economy. I did not like the idea from the beginning but that is what we were charged by Congress to do, and that is what we did.
I believe the bonuses should be paid because it is unconstitutional to confiscate duly earned wealth with an ex post fact o law. Whether you like the way they were earned or not, they were earned, legally. For the government to decide that because the legal action of a group of people is unpopular, they can confiscate their wealth is a dangerous precedent. (It reminds one of Warsaw in 1939) Who is next group of people that will be done to? Whose to say that someone who promulgates an unpopular idea will not have their wealth confiscated because their ideas are unpopular or politically incorrect. The argument that the bonuses should not be given because they reward failure is ludicrous. Rewarding failure was the purpose of TARP and the stimulus. The money was given so incompetent nincompoops would not have to fail and innocent people would not have to suffer for their failure. Rewarding failure and giving money to people who did not earn it and do not deserve it is what the sub-prime mortgages are all about, and is what this administration is about. They have appointed a Secretary of the Treasury who does not pay his own taxes, and blames his tax problems on Turb0-tax. It is about entitlement. Denying the bonuses is contrary to everything the stimulus and TARP monies were given to do. It is duplicityl.
Then what are people upset about? This is one of those media driven issues. Okay I agree it wasn't the best decision for public relations for AIG to pay the bonuses. AIG probably should have denied the payment and taken their lumps. However, if they had done that and gone bankrupt despite the injection of $100 billion from the government. What do you suppose would have happened?
Do you think Mr. Liddy would have been called before Congress and excoriated for misusing and mismanaging the stimulus funds? Do you think the Attorney General of New York would have subpoenaed records to see who misused the funds? Do you think any Congressman would have taken an iota responsibility for the absolutely ridiculous idea of bailing out AIG?
There is a lesson to learn from this: 0nce a business submits to government control it is destined to fail. Because governments do not exist to make people lives easier and they certainly do not know how to make a profit. (Amtrak and the U.S Postal service are examples) Governments exists to control. President Ronald Reagan used to say the eight words a small business man dreaded to hear were, "I'm from the government; I'm here to help." Well I think I know one large business that is beginning to feel that way. Government Help: now there is an oxymoron.
So why the hoopla? Why is the media concentrating on this and not the banks AIG gave money to in Europe or Fannie Mae or Freddie Mac? I will tell you why: demonizing AIG takes the focus off the real culprits, Congress and the President, who created this mess, authorized the budget and now want us to see them as our benevolent protector. And where is the Republican party in all this?
A colleague at work asked me why I thought several Republicans voted to confiscate the bonuses rather than to stand on good law and principle. I said because as politicians they did not have the guts to make an unpopular vote, because it was the right thing to do. Many politicians today govern by the polls not by principle. That is what this is about. Are we going to be a government that is built on virtue, principle and law or is every wave of public opinion going to dictate policy?
The right thing for AIG to do is to hold their noses, pay the bonuses, get rid of the numskulls who got us into this mess. Then quickly divest themselves of government money. The right thing for Congress to do is to say to the American people, "Both parties have failed you for last 20 years. We have governed based on what was popular rather than on what was right. We have rewarded failure and incompetence and created a victimized, dysfunctional society. It stops here! it stops now! We can do something different. We can have hope again we can have change. Yes we can."
Former British Prime Minister Margaret Thatcher said, " The problem with socialism is that government eventually run out of every body else's money." Well Mrs. Thatcher I have good news for the socialists. The 111th Congress of the United States and this administration has figured out a way to overcome the greatest weakness of socialism. When they run out of every body's money, when they have taxed us beyond our limit, they will just borrow or print some more. As Senator John McCain has said, this is generational theft; it is government sanctioned abuse. I think the correct term is "tyranny." It may be time for a tea party!
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