Sunday, March 15, 2009

Why Worry About Earmarks, When We Have AIG?

So Congress and the President are worried about bonuses that AIG paid out. This is the same Congress and President who passed a $800 billion stimulus package that does anything but stimulate and a $410 billion spending bill with $7.7 billion in earmarks. Let's look at these for a minute.

AIG received approximately $170 billion in aid. They have given out about $170 million in bonuses. Or 0.1%, one tenth of one percent. Not too bad since we were told that if we didn't help out AIG then the whole world was going to implode on itself and the four horseman of the apocalypse would be running rampant. Oh yeah, and there is the little thing that the vast majority of the bonuses were contractual obligations agreed to before AIG was ever helped. I know it may be a difficult concept for some, but some people work through a contract, and therefore get paid according to the contract.

If you really want to see the four horseman, just let the government have the power to null and void any contract at will (sort of the like allowing bankruptcy judges to "re-write" the terms of a mortgage). Then what would be the point of making a contract at all? You never have a clue what the government is going to do (not that you do anyway).

So AIG pays out 0.1% of the taxpayers money and we are in an uproar. Meanwhile Congress recently passed a $410 billion spending bill with $7.7 billion in earmarks. That is 1.9%, or nineteen times the rate that AIG paid out in bonuses. Obama's talk of the spending bill being last year's business is a pile of malarky. Congress held the bill over specifically because they weren't going to get the spending they wanted under the last president (which considering the amount of spending that he did allow is impressive). So this bill is all the current Congress and Administration's. You can bet if McCain had have been elected with the same members of Congress elected, the bill would have been passed and signed before Thanksgiving. Sorry Mr. President, you have to take responsibility for this.

Why is it that taking responsibility is so hard? Truman said, "The Buck stops here." So far this administration has said, "Let's print some more Bucks, then no one will blame us, because the Bucks will never stop!" Geithner was the "only" one who could get us out of this mess, so inspite of the fact that he is a tax cheat we had to approve him. Yet we see that he really doesn't know what to do. A couple of weeks ago we were on the cusp of the Greater Depression. Now, the economy is sound and things are looking better? Hogwash! You can put all the lipstick on the pig you want. It is still a pig. Or you can wrap a rotting fish in gift paper, it is still a rotting fish.

I really don't care about AIG's bonuses. While the government may have not had the foresight to see that bonuses would still be paid, I expect government to not have foresight, they have no reason to. The only people who should be upset at AIG is the stockholders. If a company that loses $62 billion (which is more profit than ExxonMobil made last year), can still payout hundreds of millions in bonuses, then maybe the people writing the contracts need to looked at again. But, if the stockholders are content enough to keep electing the same board of directors who approve of those contracts, then they only have themselves to blame.

Sort of like the people who voted for Change, without specifying what kind of change they wanted...

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