MINOT, NORTH DAKOTA —Wow. Finally, there is outrage. $165 million
in bonuses to AIG employees! As appalling as the bonuses are, the outrage
is misplaced. Our elected officials — the root cause of this
debacle — are working hard to divert our attention.
Until the American public wakes up and redirects its outrage to the
right target, the waste of precious taxpayer dollars, the mismanagement
of our resources, and the bankrupting of our nation will continue while
real problems go unattended and the real needs remain unmet.
Senator Grassley (R-Iowa) suggested that AIG executives do the honorable
thing: apologize to the American public and then commit suicide. President
Obama, accusing AIG of reckless greed, pledged to stop the bonus payouts.
Senate Minority leader McConnell called the bonuses “appalling.” Rep.
Phil Hare (D-Ill.) said, “Clearly, the ‘G’ in AIG
stands for greed. It is outrageous that taxpayers are subsidizing bonuses
as much as $6.5 million at a time when working families are struggling
to make ends meet.”
Yes, AIG received $170 billion from taxpayers
to shore up the insurance commitments. How? Last October, at the
urging of the previous Administration, Congress pushed to “immediately” enact what became known
as the Troubled Assets Relief Program (TARP) — a $700 billion
bailout that few if any elected officials read. Adding insult to injury,
Senator Dodd (D-Conn) added language to the subsequent $787 stimulus
bill passed by Congress that allowed the payment of bonuses to AIG
executives. This was not a mistake on his part; he did it specifically
to ensure that the AIG bonuses would be paid. Dodd and Obama received
huge campaign contributions from AIG — more
than $100,000 each. Where is the outrage?
If any legislator has serious genuine concerns, all that needs be done
is to amend the bill to address the concerns. Not a single elected
official has suggested doing so. Why?
The housing crisis did not happen simply because of greed in the private
sector. “Good intentions” on the part of Congress directed
that Fannie Mae and Freddy Mac approve loans that were known to be
Wall Street greed did not simply happen. It was Congress that passed
the laws to permit investment banks to do what they ended up doing.
Congress itself removed the barriers that had been in place to prevent
While the President expresses outrage and rails against “recklessness
and greed,” he privately signed the biggest spending bill in
history filled with billions of dollars in “earmarks.” Earmarks
are taxpayers dollars allocated to special interest projects in congressional
districts. In short, they are political payoffs to curry favor in exchange
for votes to keep elected officials in office.
Rep. Hare spews the proper rhetoric when he notes it is outrageous
that taxpayers are subsidizing bonuses when working families are struggling
to make ends meet. However, he voted for the billions in earmarks in
the most recent spending bill, ALL of which is “subsidized” by
families struggling to make ends meet.
There is no need to bailout any business or industry. Contrary to the
rhetoric, if these entities failed, we would not be worse off; we would
be better off. The taxpayers should not be underwriting private businesses
that were poorly managed and operated. Such entities should go out
of business; that is the efficiency of capitalism. Those that fail
to meet the market demand or fail to operate productively fail. Those
that produce what the market wants and are well run succeed. Government
bailouts reward failure and penalize taxpayers.
Elected officials are attempting to save entities that have failed.
Unfortunately, they are doing it with our money, not their own. They
are doing so either because they are incompetent or corrupt; they have
no idea what they are doing, or they are so arrogant and self-serving
they will do anything (with someone else’s money) to wield power
they do not deserve.
Where is the outrage for these developments? Senator Grassley is right
about the need for those who have harmed our economy to apologize to
American taxpayers and then commit “political” suicide
by resigning. Senator Grassley should set the example — apologize
and resign. He should be followed by every congressman and woman who
voted for the bonuses, the “earmark” filled spending bill,
or who allowed Wall Street to become bankers, or who directed Freddie
Mac and Fanny Mae to buy sub-prime loans, or who signed on to the community
This is a first and a necessary step if we are to clean up the heavy
burden that has been placed on American’s taxpayers and families.
Unfortunately, our elected officials seem to have effectively diverted
attention away from the real cause of this financial debacle — themselves.
See this column at News
A Voice from Fly-Over
A Voice from Fly-Over Country is copyright © 2009 by Robert
L. Hale and the Fitzgerald Griffin
All rights reserved.
Robert L. Hale received his J.D. in law from Gonzaga University Law
School in Spokane, Washington. He is founder and director of a non-profit
public interest law firm. For more than three decades he has been involved
in drafting proposed laws and counseling elected officials in ways
to remove burdensome and unnecessary rules and regulations.
See a complete biographical sketch.
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