AIG Bonus Outrage is a Distraction

by Sal on March 18, 2009

in Economy,Media Bias,Politics

The circus that  is the AIG Bonus Outrage is a typical Washington case of wag-the-dog.  The bonuses were retention bonuses to keep employees who were laid off as part of the AIG restructuring, but needed for a specified amount of time for a transition.  AIG was legally-required to pay these bonuses, and it was even written into the stimulus law by Sen. Chris Dodd.  The amount and date of these bonuses have been known for months, yet now the administration expresses “outrage” that $165 million is being used to cover bonuses.

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:

Yet now, Democrats are calling for a 100% tax on the bonus recipients, and expressing moral indignation about the bonuses (where is the moral indignation regarding the six-figure donation that AIG gave to Barack Obama’s campaign?)  The real outrage should be directed to the fact that the AIG bailout money is essentially paying off its creditors overseas.  So essentially, with the AIG bailout, we are bailing out the rest of the world.

This whole episode illustrates that the Government has absolutely no business running companies.  It is criminal that the government have any say in how a company runs its affairs.  AIG has every right to give bonuses to whomever it wants.  It also has every right to go bankrupt and fail.  It may spark a temporary downturn, but new ventures would pop up to take its place.  It is also interesting how many of the companies that received bailouts now want to return them when strings start getting attached.  Companies so willing to take a free check to get through a crisis are not so willing and are able to find other ways when the government starts exerting control.

The government should cease all bailouts, begin to work out payment schedules to get its bailout money back, and end this whole bailout culture, which has been a dismal failure.  The bonus scenario is just a distraction from the larger reality that government does not work when it comes to solving economic problems in our country.  The answer is for government to get out of the way, and to incentivize growth by lowering taxes, streamlining regulations, and getting it’s own financial house in order.

{ 2 trackbacks }

Obama-Gate: Rush Wants Obama To Fail, But AIG Wanted Obama and Dodd On Their Side « Peace and Freedom Global Future
March 18, 2009 at 8:38 am
Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”? « Peace and Freedom Global Future
March 21, 2009 at 11:20 am

{ 4 comments… read them below or add one }

Snoop-Diggity-DANG-Dawg March 18, 2009 at 12:30 pm

Yeah, no kidding. We went from “Rush Limbaugh!” to “Shelby Steele!” to “Megan McCain” to “AIG!” in about 4 days.


WillG March 18, 2009 at 1:47 pm

In this Twilight Zone time we are living in, why am I not surprised that Sen. Chris “Sweetheart Mortgage” Dodd (D-CT) and Rep. Barney “I had a sexual relationship with a Fannie Mae executive Herb Moses” Frank (D-MA) are the one’s most agitated? They are the crooks!

All of this is a contract issue. The employees are entitled, by contract, to those bonuses, and that’s that! Congress, Obama, keep out!

There was a great article about this titled “Bonus Indignation” found at

It also really skewers Chuck Grassley for his seppuku remark (pun intended).


BARB March 18, 2009 at 4:28 pm

RE: (where is the moral indignation regarding the six-figure donation that AIG gave to Barack Obama’s campaign)

A reporter this morning asked Obama if he planned to ask for Geithner’s resignation and also if he planned to return the $100,000 contribution AIG gave to his campaign. Obama went on and on and on about how he would stand by Geithner, and what a great job he was doing under theses circumstances…and then said “NEXT QUESTION”. Did he think were too stupid to notice that he never answered the second question…”would he return AIG’s $100,000 contribution to him??? Talk about a hypocrite!!


Ron Russell March 19, 2009 at 5:21 am

Yes, the AIG bonuses are like a flea on a dog—really too small to do much damage but 10,ooo fleas thats another story, and that what the story should be about. But this flea is troubling in that its a Democratic flea and the Republicans are coming with the bug spray and the Demos are running for cover. This could turn into a big thing for the administration.


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