Last fall, AIG was deemed 'too big to fail' and was thus given TARP bailout money, and they've received additional taxpayer money from the 'stimulus' package recently passed. Now, we find out that executives at AIG have received $165 million in bonuses from that taxpayer money.
Cue the real outrage from the American public, and the fake outrage from Congress.
A couple thoughts. First, let's keep this in perspective - this is $165 million. May I remind you that Obama and the Democrats have spent multiple trillions of dollars in the past two months on bailouts and government expansions?? This executive bonus is literally a miniscule fraction of 1% of the wasted money that Democrats have thrown around lately. And we're now outraged by this? Shouldn't we be far more angry about the bailouts/'stimulus' packages than this bonus?? Aside from that, if you were one of those people who supported all those bailouts and 'stimulus' packages, you have absolutely no grounds for anger, because this is precisely what you supported.
Remember, that $700 billion had absolutely no hooks or stipulations on it, and the Treasury Secretary (Paulson at the time) had absolute authority over it to do whatever he wanted. There was no accountability. There was no responsibility. There was no transparency. These were all things that conservatives were pointing out before the votes took place, but they didn't seem to matter at the time. Now, after it's too late...well, too bad. You got what you wanted. If you were too stupid to connect the rather obvious dots at the time, then you need to just shut up now. Even better, how about you open your eyes and pay attention to the people who were exactly right back then?
I'm sure you'll also be shocked to find out that Barack Obama and Chris Dodd both received over $100,000 in campaign contributions from AIG, the top two recipients (Dodd's wife, who used to run an AIG sub, also benefited handsomely). Other prominent Democrats received big chunks of money, too, including Joe Biden and Hillary Clinton. Coincidentally, those are the same people who are now howling about AIG's wrongs. Hmmm...
But back to the main issue. Do you want proof of the disingenuousness from the Democrats? Well, while they're feigning their outrage at this horrible abuse of taxpayer money, let's remember that this was also a provision of the 'stimulus' package, which Democrats rushed into law despite no Senator having more than 12 hours to read the 1,400+ page bill. Also, we now know that the Obama administration (via Tim "tax cheat" Geithner) actually instructed Senator Chris Dodd to put in the language that protected these bonuses into the bill. So, let's recap:
1. AIG gave boatloads of campaign money to Obama, Dodd, and other Democrats.
2. Obama and Dodd inserted a provision into the 'stimulus' package -- which no one read or understood -- that specifically protected AIG executive bonuses.
3. The American public now knows AIG execs received big bucks bonuses and are outraged by it.
4. Obama, Dodd, and other Democrats are suddenly outraged by this misuse of taxpayer dollars.
Got it?
Since top Democrats have been saying they've just found out about these bonuses, we've now also learned that those same top Democrats actually knew about them since as far back as December! It doesn't get much more dishonest than this, folks.
But guess what? You guessed it...it gets worse. In a knee-jerk reaction, Congress whipped up a quick vengeance tax on executive bonuses which would effectively tax corporate leaders at a 90% tax rate. It passed the House (infuriatingly, with plenty of GOP support), and is under consideration in the Senate despite being blatantly unconstitutional. Why did they do it? To 'get that bonus money back' is the official answer. We'll get to the real reason in a moment.
This should be extremely disturbing to all Americans. Look at the broader context: Congress is leveling a tax on a small, specific group of individual, private citizens for the purpose of political retribution. How is this different than the tactics of oppressive socialist governments? If they do this to financial institution CEOs, what's to keep them from doing it to any other industry or segment of the country? Absolutely nothing.
Rasmussen provides a little context to this particular tax (emphasis mine):
And even though the 90 percent tax is a reaction to the AIG bonus fiasco, you have to wonder if the very-liberal-left House Democrats have a much broader agenda: to completely overturn the supply-side tax cuts of Ronald Reagan and John F. Kennedy.
A bit of history is in order. Following World War I, the Harding-Coolidge-Mellon Republicans returned the country to tax normalcy by reducing Woodrow Wilson's 75 percent wartime tax to 25 percent -- thus triggering the roaring growth of the 1920s. Then came the Depression, spawned in large part by Herbert Hoover and FDR, who raised the top tax rate to 63 percent, 70 percent and finally 94 percent.
The Robert Taft Republican Congress elected in 1946 lowered those tax rates, but they later bounced back to 91 percent, where they held until JFK proposed sweeping tax reform in the 1960s. The top tax rate was reduced to 70 percent, igniting the 1960s boom -- until it was undone by the inflationary Fed and Nixon's de-linking of the dollar from gold. But President Reagan slashed the top tax rate all the way down to 28 percent. This launched a multi-decade boom, with the top rate not straying far from Reagan's vision.
Now, Obama has said that he has no intention of returning to the 70 percent or 90 percent tax rates of the past. But one wonders if the 90 percent House Democratic tax rate on so-called unearned income (bonuses) might not be the congressional tail that wags the presidential dog.
Most folks will say this scenario is farfetched. But it's worth pondering. Is there truly a tax-the-rich hidden agenda in Washington that goes far beyond the Obama budget?
I wonder about this simply because there's a much better way to recoup the misbegotten AIG bonuses. Though no one in Congress is paying any attention to beleaguered Treasury man Tim Geithner, he explained in a March 17 letter to Nancy Pelosi that the Treasury "will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid. In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments." So the AIG bonus problem can be remedied in a much calmer and simpler way than returning to 90 percent tax rates.
But the bigger point is this: A 90 percent tax rate on financial bonuses is so punitive that it will surely drive away the best and brightest from the very banks that must heal the credit system. Do we really want D-minus students -- who are willing to accept massive tax punishment -- in charge of a trillion dollars in taxpayer money and spearheading economic recovery? The perverse incentives of tax retribution against AIG and other TARPed banks will surely backfire, and taxpayers and economic recovery will take the hit.
You see, taxes matter. They hugely impact economic behavior. The whole economic system is run on incentives to work, invest and take risks. And it must pay, after tax, to ignite the entrepreneurial activity that really drives the economy. Like it or not, our free-market capitalist system is driven by the economic activist, provided he or she is properly rewarded.
So the real battle here in fact could be a war between the left wing of the Democratic Party and the Reagan supply-side incentive model of economic growth.
And this is what we've been saying for quite a while - Obama is trying to re-make America into a socialist society where the government controls everything and redistributes wealth in whatever way they think is fair. This philosophy has nothing to do with capitalist markets or economic recovery, and revolts at the idea of success and just compensation for that success. Unfortunately, Obama doesn't have a clue how to deal with businesses. He apparently views them as suicide bombers, thus it is up to him to pry their fingers off the triggers of their 'bombs' and control them. It's utterly ridiculous, to the point of economic dangerousness.Sure, I'm angry that those AIG guys got the bonuses. I hate golden parachutes. The company should have gone into bankruptcy, and its assets should have been broken up and sold to other more responsible companies. But I'm not one bit surprised that this mess happened; if you're a regular reader here, you probably aren't either. I'm far more angry about the corruption, dishonesty, and blatant waste of taxpayer money -- which is threatening to bankrupt our economy for generations -- than these bonuses. Let's keep our eye on the real issues, okay?
Ultimately, what it comes down to is the fact that the government should have kept its collective nose out of this altogether. They should never have bailed out any of these companies. They should never have shouldered their way into running these businesses. They should never have spent multiple trillions of dollars that haven't been earned yet on political cronies and expansion of government in the name of 'crisis'. This is why principles matter. True conservatives were against all of these measures from day one based on principles that have held true and are now being proven to be exactly correct. Those faux-conservatives who compromised in the name of 'crisis' and allowed all of this to happen are equally at fault as the Democrats pushing all of this through. We need to get back to the core principles of conservatism, and one of the biggest of those is smaller government. Look at the mess that is unfolding because of the departure from those principles.
Let's always keep in mind where the real roots of the problem rest: big government.
There's my two cents.
Sources:
http://www.theresmytwocents.com/2009/03/telling-it-like-it-is-on-aig-bonuses.html
http://www.theresmytwocents.com/2009/03/treasury-is-absolute-mess.html
http://johnboehner.house.gov/News/DocumentSingle.aspx?DocumentID=115418
http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_lawrence_kudlow/a_hidden_agenda_behind_the_90_percent_tax
http://michellemalkin.com/2009/03/19/roll-call-vote-breakdown-the-85-house-republicans-who-supported-rangels-90-percent-bonus-tax/
http://www.newsmax.com/insidecover/obama_AIG_bonus/2009/03/18/193222.html?s=al&promo_code=7C64-1
http://apnews.myway.com/article/20090320/D9720I901.html
http://minx.cc/?post=284637
http://patterico.com/2009/03/19/obama-the-impotent-president/
http://gatewaypundit.blogspot.com/2009/03/democrook-watch-dodds-wife-is-former.html
http://hotair.com/archives/2009/03/23/flashback-kashkari-grilled-on-aig-bonuses-on-december-10/
No comments:
Post a Comment