AIG or the Federal GovernmentPolicy

As everyone piles on the AIG bonus story, with $165 million in executive bonuses for an annual loss of $100 billion, the ones I want to hear the least from are Congressional folks (and for that matter, President Obama back when he used to show up once in a while in the Senate) whose financial management of the government makes AIG look downright solvent.

As of today, the federal government is in debt 11 TRILLION dollars! It was 10 trillion six months ago. It was under 6 trillion in 2000. There are no clean hands here.

But listen to these quotes from politicians, and see if we the people couldn’t say the exact same thing about them.

Senator Richard Shelby (R-Alabama) said “These people brought this on themselves. Now you’re rewarding failure. A lot of these people should be fired, not awarded bonuses.”

Senator Jon Tester (D-Montana) said AIG executives “need to understand that the only reason they even have a job is because of the taxpayers.”

Senator Dick Durbin (D-Illinois) said “I’ve had it.” and “The fact that they continue to do it while we pour in billions of dollars is undefensible.”

Representative Barney Frank (D-Massachusetts), Chairman of the House Financial Services Committee, said paying these bonuses would be “rewarding incompetence” and “They don’t have a right to their jobs forever.”

President Obama said “This is a corporation that finds itself in financial distress due to recklessness and greed.”

Sen. Christopher Dodd, chairman of the Committee on Banking, Housing and Urban Affairs. “This is another outrageous example of executives enriching themselves at the expense of taxpayers.”

Dodd also said of the bonuses,”We have a right to tax.”

a RIGHT to tax?

Friends, the federal government is in no position to criticize anyone.

  • Mark

    Are you saying that when the government saves a company – to the tune of $170 billion – that was set to implode, the government can’t act to protect our tax dollars by questioning how that company spends our money? Even when that company should be bankrupt many times over?

    Are you saying it’s ok for a company to use our tax dollars to give multi-million dollar bonuses, even when the employees receiving those bonuses have left the company?

    Shouldn’t the Congress try to protect our money? Or do you think it’s ok for the government to enrich the wealthy at taxpayer expense?

  • http://www.bearingdrift.com Brian Kirwin

    Mark, it would be nice if you didn’t automatically disagree with everything I write just because I wrote it, since what I say in this piece you’ve written in comments in the past.

    Here’s a general rule. If you ask “Are you saying…..” whatever, the answer is no.

    What I am saying is what I wrote. If I didn’t write it, I’m not saying that.

    Most readers learn that by third grade.

  • http://www.amit-singh.com Amit

    Dodd is correct when he says they have the Right to tax. It is in the 16th Amendment which is my most hated amendment.

  • http://bearingdrift.com Steven Osborne

    Amit,

    I agree on the 16th Amendment

    Let’s repeal that buger and get back to the Constitution!

  • http://citizentom.com/ Citizen Tom

    If Congress passes their special tax just for AIG, it will be interesting to see how the Supreme Court decides the constitutionality of the law. Although I too dislike the 16th Amendment and would be happy to see it repealed, I do not think it was intended to justify the confiscation of private property using the power of taxation. Taxes have never been so narrowly defined as to target just one particular group within a company.

    What is sad is that matters have deteriorated to such a state that we are all too likely to find out what the Supreme Court thinks of such a law. In fact, what the Federal Government has done of late should frighten everyone. We are teetering on the edge of tyranny.

  • http://www.amit-singh.com Amit

    agree Citizen Tom. besides, the $165M as offensive as it is, is negligible given everything else that is going on. it is a terrific way for the govt to continue doing what they have been doing all the while pretending to protect Americans.

  • http://www.bearingdrift.com Brian Kirwin

    Amit, Steven, and others.

    Our Government has no rights. It has powers. The people have rights, and the people grant government powers.

    Hence, there is no right to tax.

  • http://TidewaterLiberty.com Britt Howard

    What a wonderfully horrible precedent, handing down specialized taxes in the name of outrage.

    It truly would open “Pandora’s Box” to even further uses of the tax code to penalize political opponents. We already have taxes putting business sectors that support Republicans at a competitive disadvantage. Dems always argue for more taxes on them. Republicans being a low tax party have a hard time returning fire. Whatever party is in the White House seems to by tradition, have the IRS audit political foes.

    This is where I argue the slippery slope……..again.

  • http://www.bearingdrift.com Brian Kirwin

    Britt, the tax climate is fairly simple. People oppose raising taxes, but don’t care if you raise taxes on someone else. As long as the “someone else” isn’t a lot of people, it’s a free shot, poll-wise.

    In the 90s, we took a whole lot of people off the tax rolls, and with fewer people paying taxes, fewer people demand tax cuts, and fewer people are outraged when taxes are mismanaged.

    Republicans are at the point where they have to get people of moderate incomes to get mad at a tax increase for fat cat bonuses. That’s a tough argument to make. Reagan did with his “you don’t help the wage earner by taxing the wage payer” speeches. But he was trying to kickstart an economy that was stagnant for a decade.

    Snapping out of a recession caused by giant amounts of personal debt finally becoming too much to shoulder is different, especially when those who issued that debt made pretty good money, and get bonuses even after the collapse.

    My only point in this was that Congressmen/Senators are the last people to lecture about fiscal responsibility.

  • Robert E Lehman

    You are right on all points, Brian.