Growing up you operate under the notion that the country is being run by brilliant and extraordinary people. Ivy League men and women making thoughtful and informed decisions based on expertise and acumen that is above the general comprehension of those outside their realm. It’s somewhat comforting too. Just the thought that: “Boy, if something comes up at least we have our best and brightest working on it.”
When you get older you understand that just because someone is a Congressman or Senator doesn’t mean they have superhuman brainpower and abilities, but in the back of your mind you still believe they are special. I mean there are only a select few that make it to that level….and through a general election process they have been publicly vetted to a certain extent. I have got to say, over the past few months, and more specifically in the last 5 or 6 days, I’ve become far less certain that this country is being run by the very best people. In fact, there seems to be an extremely large percentage of these people that could be categorized in either or both of these two categories: crooks and idiots.
Unless you have been under a rock the past week you’ve seen, heard, or read something about the outrageous “bonuses” that were granted to people within the financial service division at AIG. This is the same AIG that received $170 Billion….I repeat $170 BILLION in taxpayer bailout money in the fourth quarter in 2008 and is currently about 80% government owned/controlled.
Unbelievably still, even with the help of that gargantuan sum, AIG still posted fourth quarter losses of $61.7 billion loss for that same quarter. Last week, it was disclosed that AIG had paid “bonuses” to employees within their financial services division equaling about $450 million in total, and “bonuses” firm-wide equaling $1.2 billion. These bonuses were paid with U.S. taxpayer money. Think of AIG as a “wash account” for over $1 Billion in government/taxpayer money.
After this news broke last week, the requisite finger pointing began. What parties were to blame? The executives at AIG?….Absolutely. Completely irresponsible in this socio-economic climate to think it’s ok to approve and grant people those sums of money in bonuses. Especially when you were ground zero for our current economic crisis and you are funding these bonuses with handout money.
The government also to blame? Yes, even more so. How can you hand out hundreds of billions of dollars in taxpayer money, with no stipulations on how it is to be spent? Total irresponsibly from the people whose job it is to be responsible.
The people that received the money to blame? Absolutely not. I blame the people who approved and doled out the bonuses, but you can hardly blame the people who simply received them. You may have just lost your pension, savings, retirement in the market and someone hands you a million dollars…and you’re supposed to turn around and give it back? No way.
I can understand the government’s frustration and disapproval with the AIG bonus situation. Quite frankly, they should have been embarrassed they did not have the foresight to stipulate where the government bailout money should be directed. I cannot, however understand the reasoning behind their reaction: quickly passing a law to tax any and all future bonuses at firms that received government funds at 90% !
The legislation that passed last Thursday calls for: “a 90% tax on bonuses awarded by corporations receiving more than $5 billion in Treasury aid from the TARP”. This is a “knee-jerk” response to an adverse situation and is both reprehensible and irresponsible on a few different fronts.
First off, I’m not even sure this bit of legislation is constitutional. I had to scour my memory banks from 7th grade Social Studies (something clearly the lawmakers did not do), but this bill seems to violate ex post facto. It creates legislation that changes the legal consequence of facts that existed prior to the enactment of the law. Even more Lehman’s terms: changing the rules as the game is being played. By the way, this piece of legislation that seems to be completely unconstitutional was approved by a vote of: 328 to 93 in the House.
In addition, imposing a government “salary cap” on TARP firms surely will cripple them going forward, as it will lead to a mass exodus of top-level talent. It makes sense on an individual level. Why work for one of a handful of these fully government-regulated TARP firms, and have 9 out of every 10 dollars you earn “confiscated” by Uncle Sam, when you can go elsewhere and get your full market value. If these firms lose their best workers and earners how are they ever suppose to bounce back? They won’t any time soon. And the longer it takes the Goldman Sachs and Bank of America’s of the world to get back on their feet, the longer the economy will take to recover. The greatest legacy of this past legislation might be that it ensures the further retardation of our economy.
You might be wondering how such an abominable piece of legalization can get through Congress. I had one thought. Although we tend to some up laws and pieces of legislation into a few lines, the actual documents are usually hundreds or thousands of pages long. Consider the timeline. The AIG bonus’s become public early last week….AIG CEO Edward Liddy testified before Congress on Wednesday March 18th…..and by Thursday the 19th, the bill had already been voted through the House.
Doesn’t that seem a little hasty? At what point between Liddy testifying on Wednesday and the Thursday afternoon vote, did the members of the House have a chance to read and review the thousand page law they were enacting? Is the reason the Congress of this country likely voted through a seemingly unconstitutional law because: they didn’t even really know what they were voting on? Important voting by the largely uninformed. Terrific.
Doling out taxpayer dollars in the billions without regulating what it could and couldn’t not be used for… passing hasty legislation after the fact…government endorsed “witch hunts” aimed at individuals who received money in order to cover up the irresponsible lack on initial controls by the federal government….does this really sound like the actions of our best and brightest? Shame on them.