Friday, March 20, 2009

Thoughts on AIG and the government-sponsored bailout

Over the course of the past few days, we, as taxpayers and Americans, have come to find out that a portion of the government bailout money that was given to AIG has been given out to some of their executives, to the tune of $165mm (give or take a few million). 73 of their executives stood to gain a bonus of at least $ 1mm.

Please don't get me wrong - I am not against bonuses. I believe that they should be paid to people when a business is profitable, when people are doing a good job, when it is deserved.

However, I do believer it was unwise for AIG to pay these bonuses to their executives. Was it illegal? No. Were they contractually obligated to pay them? From what I understand, yes they were. Could those executives have chosen to turn down the bonuses? Yes. Many things could have happened better. But, what other companies have also paid this same kind of bonus from the government bailout funds that they received? Apparently, they paid enough to Democrats over the years to keep it quiet. How many of Obama's advisors received bonuses in the past from firms that are now failing? Many of them.

My problem, though, is not necessarily with AIG. My problem is with the government officials that allowed for this to happen in the first place. The bailout, first and foremost, was wrong and should never have happened. It is not the government's role to underwrite industry. By handing out money (that they did not have), they opened themselves up for this kind of mismanagement. And let us not forget, they inserted the clause into the bill that allowed for these bonuses to be paid in the first place. Had Congress been allowed to read the bill, maybe more would have voted against it had they known this clause was inserted.

Consider some of the principle characters in Congress (and Washington) that helped lead the charge on this bailout: Barney Frank, Chris Dodd, Nancy Pelosi, Harry Reid, Chuck Schumer, Arlen Specter, and the Obama administration. It is my contention that they had this amendment inserted into the bailout bill in order to create this anger we are seeing right now. They now have the opprotunity to harness the anger of the American people and use it as an excuse to have more government intervention into places where it should not be. The faux outrage shown by Congress (mostly Democrats, with a few Republicans joining in) is nauseating. They knew this was going to happen when they passed the bill. They knew well before the bonuses were paid that these bonuses would become public, yet they allowed it to happen. They wanted a political football to kick around to try and make themselves look good.

My problem is that there are too many people out there who are too dense to see this. They are too lazy to think about it and put the puzzle pieces together. They cannot see it as a government ploy to give the government more power. They see it as being the fault of AIG with no government responsibility whatsoever. People are so reliant on government now that they think government is the cure to everything.

Now, Congress wants to tax the bonuses to the tune of 90%. I am not sure that this is even legal (and Congress knows that), but they are going to try. They want the outrage to be focused on AIG, not on them. After all, government is the one that is causing things to fall apart. They need a scapegoat. Magicians would call it slight-of-hand. In football, it is referred to as a misdirection. In the Democrat Party, it is called blaming someone else.

Barney 'Banking Queen' Frank said in committee the other day that since it is his money, the government's money, the taxpayer's money, that we ought to go in and take it back. He wants the names of those who received bonus money to be released, regardless of the safety of those involved. Many on the loony left are threatening violence against these people. He does not care about safety. He only wants people to think he is being heroic in getting this money back. Many are too caught up in the anger of the moment to realize that this fruitcake helped cause the whole crisis in the first place.

Ultimately, the money was given to AIG (and other companies) to help them continue to do business and remain afloat so as to avoid bankruptcy. However, the government wants to tell them how to run their business (as if the government knew what it was doing). This is the problem you have when you allow government to get involved. They are not content watching from the sidelines. They want to run the show. Since they are handing out the money, they want to tell you how to spend it. This leads to socialism, which is the ultimate goal of these people.

This is the reason some governors do not want to accept stimulus money. It comes with too many strings attached. The governors know that by accepting the money, they will then accept the federal government's power to come in and tell them how to spend it. Who would know better how to spend moeny for the benefit of the state? Would it be the states? Or would it be the federal government? The answer is obvious.

It is time that we, as Americans and as taxpayers, say that enough is enough. Bailouts do not work. While it is not good that companies go bankrupt or go out of business, it has to be allowed to happen. Government intervention will not fix things. The strange thing about a free market is that it has the ability to heal itself. That is what happened in the 80's. That is what happened in the years after 9/11. It can happen again. In an age of instant gratification, we are not willing to be patient and allow for the free market to fix itself. We want it now, and people are unfortunately willing to give the government more power to try to fix things. Once the government has that power, they are not going to give it back. It is up to us to get it back from the government.

So I say to you: Get out and nominate conservative candidates that know the power belongs to the Americans, not to the government. Vote those clowns out of office that think government is the answer. Do your part. I will surely do mine, starting with being active in campaigns to unseat my Congressman and my Senator. Remember, the Constitution starts out "We the people...". It does not say "We the government.."

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