AIG has been attacked from all sides regarding its awarding of $165 million in bonuses this weekend. Mr. Obama was furious about the bonuses, and has asked his administration to see what is to be done. New York Attorney General Andrew Cuomo jumped on the bandwagon, demanding that AIG give him a list of all people obtaining bonuses within three hours, or be ready for the repercussions.
Simply, people, you know who is responsible for this? Mr. Obama and the Democrats themselves.
n 1993, Congress limited the tax deduction companies could take for cash payments to $1 million. The result was a cottage industry of lawyers, consultants and advisors who structure even bigger pay packages with creative legal strategies that now make the AIG bonuses difficult to rescind.
To compound matters, Congress missed the boat on regulations. There were also no regulations to prevent AIG from making what Fed Chairman Ben Bernanke told CBS News Sunday were “all kinds of unconscionable bets.” In fact, it was a law approved by Congress in 2000 and signed by Bill Clinton that allowed companies to place tens of trillions of dollars of these risky credit default swap bets.
Last fall, when TARP was being discussed, Republican Congressman wanted restrictions on how bailout money would be used, including some limitations on bonuses. Democrats in Congress, as well as Hank Paulson, did not want any specifics in the bill. They wanted quick passage, so that it would give them the most flexibility to respond to the crisis.
Now, we are seeing the after effects. It is a joke for Mr. Obama to now complain about bonuses that he basically voted for. It is also a joke, because Democrats have argued that all government spending is stimulus; well, then so is bonuses to employees, correct? Everything is stimulus! That has been their warcry for months. Now, when they see that there is going to be a populist revolt against the bailouts, they are all of a sudden worried about how the money is going to be spent.
Additionally, the outrage is idiotic. The bonuses that AIG are paying is 1/1000 of the money from the bailout (or, 0.1% of the $165 Billion that has been given to AIG). Nobody seems to be worried about the other 99.9% of funds to AIG, or the 99.99% given overall.
To me, this is putting lipstick on a pig. The TARP and bailouts were always a pig. They are ugly, dirty, and full of fat. For them to complain that the pork is all of sudden unpalatable is ludicrous, because they have pushed the pig on us from the beginning. The bonuses for AIG executives is just a natural progression from the initial mess of bailouts. The complaints now are too little, too late.
Makes me remember the good ole ‘lipstick on a pig’ controversy…ah, the good ole days.