AIG: Misdirection 101
Bob Owens (HT Michelle Malkin) suggests some perspective, and an appropriate focus for righteous indignation (bold is mine; link was in original):
Barack Obama’s lack of leadership in a down economy has now hit crisis proportions, as his claimed inability to block millions of dollars in bonuses for executives of bailout recipient AIG has caused even his supporters to turn on him (Note: Tim Geithner said that he’s taking it out of the company’s hide; see this post from early this morning for details and implications. — Ed).
But while the ire of Congress and the media focus are on the $165 million that AIG paid out in bonuses to their executives, the president is hoping you won’t notice the $100 billion in taxpayer bailout dollars that AIG paid out to other banks, including $58 billion to foreign banks and $36 billion given to French and German banks alone.
The Obama administration is allowing AIG to bail out the rest of the world with your tax dollars.
So by all means, the president is happy to have you railing at “evil” but relatively small potatoes AIG executive bonuses, as it points your outrage away from his own far more costly executive abuses.
Meanwhile, CNBC’s Rick “Tea Party” Santelli gave proper instruction on the relative importance of certain letters:
From a report on Santelli’s appearance by the Business & Media Institute:
“Now think about it this way – maybe I’m missing something, but the outrage seems to be about ‘M’s – millions of dollars, right? Hundred and sixty five dollars, OK?” Santelli said, as he drew a large capital “M” on a sheet of paper. “I would think that it should be looked at as a pretty big positive because when you go from the ‘M,’ maybe you should try to go to the ‘B’s – which is the billions of dollars. And maybe that’s going to even enlighten for the ‘T’ – trillions of dollars.”
“Squawk Box” co-host Becky Quick suggested the outrage wasn’t over the $165 million amount, but the “rewarding of bad behavior.” Yet, Santelli thought the bonus issue was being used to resonate with the average American, instead of attempting to examine the much larger pools of money.
“Don’t you think that this dynamic – the average guy reading his newspaper – is really starting to be in-tune with this?” Santelli said. “And, I think bonuses really strike a chord as to the dynamic you’re talking about. But there’s many degrees of intensity if one really wants to shine the light on the money that’s being scrutinized. You know, there’s ‘M’s, there’s ‘B’s, and then there’s ‘T’s.
The federal government alone spends more than twice as much as those AIG bonuses every hour, every day, 24-7-365. In fact, under Obama’s new budget, it will only take Uncle Sam 24 minutes and 6 seconds to spend that much:
Where’s the (properly placed) outrage?
[...] Yet this is simply a distraction and misdirection. The real outrage should not be about these bonuses, but about the bailout as a whole. The bonuses are a drop in the bucket of the entire bailout that AIG has received. CNBC’s Rick Santelli puts the matter in perspective: [...]
Pingback by AIG Bonus Outrage is a Distraction | Axis of Right — March 18, 2009 @ 8:26 am
All these things are true, however, we have overlooked the more critical question: If we allowed AIG to go through the Bankruptcy process would the $165 million even be in play? Where on the pecking order of cents on the dollar would these people be? Wages of employees are usually number 1, however, a bonus is not a wage and this money was a contractual obligation. Wouldn’t such a contract be subordinate to the bond holders and the insured with claims to be paid?
It seems to me we should be flogging the government for bailing out AIG and interfering with the Bankruptcy process. Everyone who was insured (auto, home, commercial property, etc.) by AIG would buy new policies as they lapsed with another insurance company. Congress and the Teacher’s Unions would take their 401k business elsewhere as well. Which leaves the CDS, those whose bonds fell below the value they insured them would get penny’s on the dollar from a liquidated AIG. All the employees of AIG would have to find themselves a new job. So why was AIG too big to fail, I don’t buy the argument, this was about political payback for the millions in campaign contributions. What everyone should be screaming about is the millions of campaign dollars the employees of AIG gave to the Democrats, and specifically Barrack Obama. This was Quid Pro Quo, a criminal fraud upon the American People.
Comment by dscott — March 18, 2009 @ 10:02 am
Here are Obama’s campaign contributions from employees of AIG totaling $112,170. Any of these guys getting a portion of the $165 million?
http://www.opensecrets.org/pres08/search.php?cid=N00009638&name=&employ=AIG&state=%28all%29&zip=%28any+zip%29&submit=OK&amt=a&sort=A
My suggestion is Obama and the rest of the Dems who got AIG campaign contributions put all that money in an account and then pay those those people proportionally from that. This way there can be no claim of Quid Pro Quo. As it stands, they should be charged with conspiracy to commit fraud for bailing out AIG.
Comment by dscott — March 18, 2009 @ 12:20 pm
I’m not surprised at this tactic. It’s typical of the socialists, pound the free market and big business to misdirect the publics outrage from the idiotic and dishonest government policies that are truly screwing things up.
I love how journalists like Quick foam about the mouth of the rewarding of bad behavior when everything they’ve supported so far does exactly that. Auto bailout = rewarded bad behavior of unions who squeeze the industry for everything it’s got. Mortgage bailouts = rewards bad behavior of people who snatched up homes they couldn’t afford and thought they could get away with it, and with Obama help, they will. Not to mention how they reward Obama for his bad behavior, by helping him get elected and glossing over his many lies and deceits because his positions are ones they agree with. Obamas economic policies are worse thefts than Madoff could ever dream about.
It also reminds me of Katie Couric, she goes on and on about CEO pay being excessive, when she earns more than quite a few CEOs and her news outlet she is supposed to be the guiding force behind and main drawing power is going into the tube.
Also notice how the private companies like AIG (well, used to be private) and CitiCorp are always in the main line of fire while GSEs like Fannie and Freddie are happily forgotten. They got bailout money too, how much are their government overlords getting in bonuses? Why no outrage at Barney Frank for his mismanagement and walking away like a bandit from them?
Comment by zf — March 18, 2009 @ 2:03 pm
The faux outrage is a smoke screen to avoid blame falling where it belong (in Congress). Many in the Senate and House have real ownership of this problem. End result? Timmy Geithner may be sacrificed in order to save Bawny Fwank and Chris Dodd and company. Congress realizes people are angry and some are already wisely worried about the mid-terms. Some folks are looking for a year like 94. No, not Gingrich and friends success in 1994. 1894 is probably a better comparison to the mood today.
Comment by Largebill — March 18, 2009 @ 2:13 pm
I could care less about $165 million in bonuses that were contractually earned, and will actually stimulate the economy. It’s the other $169,835,000,000 that I’m pissed about.
From what Liddy said today, these bonuses went not to the execs that mismanaged AIG — they’re gone; they went to the pros that kept $1.6 trillion in portfolios from imploding and righted the ship.
They considered not paying bonuses, but the lawsuits and resultant loss from unmanaged assets would have dwarfed the bonus money. It sounded to me like this Liddy guy is the only person tangentially related to this administration that is competent, and he’s the guy getting raked over the coals.
Comment by Joe C. — March 18, 2009 @ 3:53 pm
By keeping the manufactured outrage front and center it not only distracts it also stokes the flames of the lefts golden ticket–class warfare.
Comment by Scott — March 18, 2009 @ 10:23 pm