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.."

The UAW: Why is there no anger at them in this whole crisis?

According to a report by Fox News (and other media outlets), the UAW owns and operates a $33 million lakeside retreat in the backwoods of Onaway, Michigan, including a $6.4 million golf course. First, let me say that I do enjoy the game of golf. I may not be very good at it, but I do find it to be a way to relax and take out some frustrations, all at the same time. So I do not begrudge the union for having a golf course.

Here is the problem: In the past 5 years, this resort has lost $23 million. As the union is having problems with a pension fund that is losing money, they continue to throw away money with this resort. The UAW covers costs for this 'Walter and May Reuther Education Center' (sounds impressive, doesn't it?) from interest earned on the strike fund. Due to losses over the past 5 years, the UAW was forced to take out loans to keep things going.

First of all, the market did well over the last 5 years (notwithstanding the last 6-9 months). Why couldn't the UAW make money on any investments over that time? Are their investment people that bad? Maybe they should have been fired, too. They should have been able to make enough money for this place to be solvent.

Also, what do they need a resort for? According to the UAW, they send workers there to "learn, experience unionism (and) commit to labor's cause." This sounds a lot like socialism to me. Basically, it is a place that they send people to in order to get them to forget free market economics and indoctrinate them with the socialist tendencies of the union.

I am in the front of the line when it comes to griping about the government bailouts. They should not happen (and there will only be more once President-elect Obama is in office and pays off his union friends). In my opinion, these businesses that did not practice good policies should be left alone to go under, including the auto industry. My problem is that the UAW did not have to give up a thing in this whole auto bailout deal. They are the main reason that the auto industry is hurting. We do not need the unions. The auto assembly folks are compensated well. Their benefits are incomparable (except with Congress).

If the auto executives are castigated for flying to D.C. on the company planes for Congressional hearings, then why are we not castigating the UAW for throwing away money (and a lot more than what the execs spent on flying to D.C.) on this golf course and resort? Can we say double-standard? Can we say vote-buying?

Government bailout hypocrisy

Is it just me, or is there a lot of hypocrisy concerning this bailout thing? The folks in Washington want the automakers to come to them with business plans in hand that says how they plan to use the money that they want from the government. Yet, the banking industry is getting their money without having to do anything, other than ask for the money. Henry Paulson cannot seem to hand out enough money right now.

Isn't it funny how the automobile CEOs are being excoriated for flying to DC on the company jets, spending so much company money (it is not from the taxes that we pay). Yet these same congressional leaders look the other way when the banking guys are doing the same thing and using the bailout money for bonuses and trips.

I saw a representative from California grilling the CEOs of the auto companies about using their corporate jets to fly to DC and acting as if he was horrified. In my humble opinion, these CEOs should have come back at him and ask him why he flies home every weekend at taxpayer expense (and then flying back to Washington at the beginning of the week), all the way across the country, increasing his carbon footprint.

There is so much hypocrisy in this, it is ludicrous. Yet, no one in the media seems to notice.