Wednesday, March 18, 2009

Much Ado About Less Than 1/10 of One Percent

We're just ending the 4th straight day of our national outrage! It started Sunday on Meet the Press and the other Sunday news shows. Obama Administration officials went out en mass and apologized for and then attempted to minimize the $165 million in bonuses paid to some officers and workers of American International Group, Inc. (AIG), the insurance industry giant who received billions of taxpayer dollars in the massive government bailout.

One Hundred Sixty Five Million Dollars is less than 1/10th of 1% of the money we taxpayers have given to AIG. Actually the Chinese loaned us most of the money, but, hey, we promised to pay them back, didn't we?

When we gave AIG all that money, we actually bought 80% of the company. We own it. As the new owners we fired the CEO, Chairman and the entire Board of Directors. We brought in our own man, Edward Liddy as the new CEO and Chairman of the Board. And we put our own Board of Directors in place. Frankly, we did exactly what we should do as new owners of a company. Liddy is our own man.

We knew about the bonuses. We knew about the contracts. Nobody at AIG hid them. They were not secret. And Edward Liddy, when he took over the company, knew about them. They were part of the package. According to Liddy they were a critical part of the package. As Liddy explained to Congress today, "I am trying desperately to prevent an uncontrolled collapse of that business."

Actually such bonuses are not that unusual in billion dollar businesses. Companies fight to hire the best and brightest. It's not unlike sports teams drafting the best players or movies hiring an "A List" star to insure a big box office run.

So bonuses that were not secret were actually paid last week. And now we are all outraged!

President Barack Obama is outraged. The public is outraged. The Congress is outraged.

Goodness knows the media is outraged! Actually, the media is thrilled beyond belief. Ratings are through the roof. They are all faking the outrage, but I digress.

The trouble is that we are all outraged about the wrong things.

First of all we ought to be outraged that we invested 180 billion dollars in a bankrupt company.

But since we spent our precious borrowed money, we ought to be outraged that the President and Congress are destroying the company we Americans now own. We ought to be outraged that President Obama lacks the courage to back the man he put in the job of saving our $180,000,000,000.00.

We ought to be really outraged at Senator Christopher Dodd, now forever to be known as the Judas of AIG. Stunningly Dodd accepted over $103,0000.00 in campaign donations from AIG just last fall, after AIG had received the bailout money. Today Senator Dodd is "demanding" that all bonuses be returned!

This rather stunning piece of hypocrisy has ABC News wondering out loud, Should Senator Dodd Shouldn't Return His AIG Bonus?

But hold on to your outrage. It gets worse. Dodd realized the bonuses needed to be paid and wrote into law safeguards to insure the bonuses were paid. But now Dodd denies ever writing the "Dodd Amendment" to the stimulus bill. The Dodd Amendment not only allows the bonuses to be paid, but requires it.

Dodd's excuse is that he never read the bill. In other words he failed to do the job for which he was hired. Perhaps AIG paid Dodd a bonus for his incompetence?

Of course this is exactly what we get when

Of course this is exactly what we get when PRESIDENT OBAMA BETRAYS HIS CAMPAIGN PROMISE TO POST ALL BILLS ONLINE FOR 5 FULL DAYS OF PUBLIC REVIEW BEFORE SIGNING. The vast army of bloggers would have actually read the bill, unlike the President or the Congress.

Finally, we ought to be outraged that we allowed our government to purchase a failed business in the first place and set up this stupid Congressional micro-management of employee salaries.

Liddy knows he is in deep trouble now. I don't envy his job and I've personally been in similar situations (albeit on a much smaller scale). He can't win. And, in the public spotlight he won't quit, although he should. He handled himself well in Congressional testimony today.

None of the outraged viewers noticed, but Liddy tried to let America know they were one the wrong page. From
tonight's article by Emily Kaiser and Corbett B. Daly for Reuters:

Liddy said the payouts were necessary to retain top employees with the specialized knowledge to dispose of $2.7 trillion in complex securities that ended up dragging the insurer to the brink of collapse last year.

He said the company had whittled down that amount to $1.6 trillion, and he was worried that employees responsible for winding down the rest would return their bonuses "with their letters of resignation," which would make the task tougher.

"It just got harder by many, many multiples," he said.

ADDENDUM: About midnight (Wednesday night/Thursday morning) I got this great tip about FOX's Shepard Smith take on the Congressional hypocrisy Hearings earlier today. This is great stuff and, for all you FOX haters out there, it is 100% correct! I simply had to share it with you. A Tip o' the Wizard's pointy cap to fellow blogger Watcher


Lee said...

I keep thinking over and over, these are the people who are going to "save the economy" and "run our health care" and "Fix Education"? Who in congress has ran a successful business? You know consistently made payroll? AIG made one hell of a mess, I would say they earned failure.

Well, Obama did say there would be sacrifices, this must be what America wanted.

MadMike said...

Fox News! Of course. Now I understand. Wizard I am proud of you. You have finally come out of the closet:-)