Tuesday, March 17, 2009

AIG, Bonuses and Government

Of course everyone is outraged now about the 150 millions in bonuses that AIG employees are receiving. After all, the company received 180 billions of taxpayer money, and we are paying their bonuses. But the democrats should be the last to be outraged. After all, it's Chris Dodd's amendment to the bailout bill that guaranteed all bonuses that were part of contracts made before the bill went into effect. So it's a specific amendment introduced by Dodd dealing with this, just to make it clear. The reasons shouldn't be hard to guess. Chris Dodd together with Barrack Obama are the biggest beneficiaries of AIG contributions in the last election cycle. As for the recipients of bonuses, of course they deserve it. After all, they worked together and earned the company 180 billions even when the businesses was going into the ground. Let me tell you, if any of you can get me 10 millions in Government money for my company, I promise you a $100k bonus!

And why would Obama's people be mad at this? After all, those employees receive this money (which comes from the Government), and they'll use it to buy cars, maybe a new home, and other consumer products, thus stimulating the economy. Isn't this that the new Keynesian push is all about? I don't agree with it, but it's the new adminstration's policy. Or maybe, like Dick Morris said, Obama is not only a socialist, but an incompetent socialist.

I think all this scandal about the bonuses is just a distraction to hide the real horror: about 93 billions of the bailout money has been paid to other banks, especially European banks. So in the end, we the taxpayers bailed out the Europeans. The bonuses represent less than 0.1% of the bailout (and they reutrn into our economy), while the amounts transfered to Europe make up more than 50%.

And one more thing. AIG is now owned 80% by the Government. All this, bonuses and foreign transfers, happened on the Government watch. AIG's CEO, Edward Liddy, is a Government appointee who doesn't receive a salary from AIG, because he is a federal bureaucrat. This should serve as the beste xample of how good the Government is at running a business. The same Government that couldn't even run a restaurant inside the Capitol. Just wait until the Government starts building cars and deciding on your treatment options...

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