19 March 2009

Misplaced Anger

There goes President Obama whipping up the populist anger once again. He goes in front of town hall meetings and talks about how angry and disappointed he is that AIG gave $165 million in bonuses. Our lawmakers than decide that they need to punish those receiving bonuses in companies that receive government bailout money and pass legislation to tax the bonuses at 90 percent. They hope the states follow suite and tax the remaining 10 percent.

No matter if you are against or for the bonuses, you should be very concerned about the knee-jerk measures Congress is taking to appease the populists. Where are those crying fascism now? This is the government leading us down a slippery slope we do not want to start down. What next, more legislation targeted at another specific group of people they disagree with or that President Obama decides to target? A contract is a contract, no matter how much it disgusts you. If you want to be disgusted, try looking in the mirror.

How about this for an example and let’s rate its fairness. Let’s say I work for a company that is getting money from the government for one reason or another. The reason the company is getting this money is that one or more divisions of the company really screwed up. But the division I am working in is going gangbusters. In fact, I did very well last quarter and exceeded my targets. According to my employment contract if I meet or exceed my targets I am entitled to a bonus. Now should I not be given the bonus just because the other divisions caused my company to be in such dire straits that it needed to belly up to the Frank-Reid-Pelosi-Dodd trough?

Try this one. I work in a competitive market. My job skills are constantly sought by other companies. I could go anywhere and they would pay me well. My company is going through some rough times and happens to be receiving government bailout money. They want to make sure they keep me because they know full well I can jump ship. So they provide me an incentive to stay through a cash bonus. Now should I not be given the incentive just because my company needed to belly up to the Frank-Reid-Pelosi-Dodd trough? Shouldn't my company try to retain talent it desperately needs as it rights its ship?

All the supposed outrage at AIG is another way to misdirect our ire at the complete incompetency of our federal government. The fact remains that Congress did not act as it should have when formulating the bail outs.

"There's always more we can do, and hindsight is 20/20," said Senate Majority Leader Harry Reid Tuesday.

But though some lawmakers did move to prevent bonuses in the stimulus bill last month, the final language actually makes an exception for pre-existing contracts, effectively exempting AIG.

Senate Banking Committee Chairman Chris Dodd, D-Connecticut, who originally proposed the executive compensation provision, said he did not include the exemption clause, which said new rules "shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009."

Really Senator Dodd? You do not know how that got in there? Let’s see, does you and President Obama the leaders in AIG political contributions have anything to do with it? I wonder.

The top ten recipients of AIG donations for the 2008 election cycle:

Sen. Chris Dodd, D-Connecticut: $103,100
President Barack Obama: $101,332

Sen. John McCain, R-Arizona: $59,499
Secretary of State Hillary Clinton: $35,965
Sen. Max Baucus, D-Montana: $24,750
Former presidential candidate Mitt Romney: $20,850
Vice President Joe Biden: $19,975
Rep. John Larson, D-Connecticut: $19,750
Sen. John Sununu, R-New Hampshire: $18,500
FormerpPresidential candidate Rudy Giuliani: $13,200

Oh yeah, Senator Dodd did have something to do with that after all. Huh, I wonder if that $103,100 jogged his memory.
Senator Christopher Dodd (D-Conn.) suffered a political blow Wednesday with the
admission that he had been involved in key legislative changes that helped pave
the way for
AIG to pay controversial bonuses.

In a retreat from earlier statements, Dodd said
Treasury Department officials had come to him last month urging him to modify an amendment to the stimulus bill that capped bonuses for firms receiving aid.

The real people that should be punished here are the members of Congress. They should forgo any pay increases until the budget is balanced and I would recommend that we retroactively tax them at 5 percent per year for each year there was no balanced budget and they served in Congress. Now that would be a step in the right direction.

All this misplaced anger is yet another smokescreen created by those in Washington, D.C. to hide their truly ugly incompetency. Thanks. This is definitely not change I can believe in.

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