Big Dogs Weblog

Obama And Dodd Are To Blame For AIG Mess

by Big Dog on Mar 18, 2009 at 05:33 Political

There is a big uproar about the retention bonuses that were paid to AIG employees after the company received over 170 billion dollars of bailout money. There are a lot of players involved but Barack Obama and Christopher Dodd are the primary culprits in this mess. More on that later.

The idea of bailing out AIG or any other company did not appeal to me and I was against it from the start. There are many people who felt that we had to bail the companies out to keep the economic foundation from collapsing. To you folks who wanted this, you got what you deserved.

The government, that is the taxpayer, should not be bailing out companies. They make it on their own or they fail and someone else takes over. By allowing government intervention we have opened a Pandora’s Box. All that happens as a result of the government sticking its nose where it does not belong is that things get even more screwed up. Very few of the people in Congress have any experience actually running a business so this, coupled with the speed with which the first bailout was passed, was a recipe for disaster and a disaster it was. The people in Congress (along with the Bush administration) who wrote the bailout bill failed to provide oversight and they failed to ensure that there were strict guidelines as to how the money could be spent.

The Obama administration took over and he asked for more money to be released. He also, with reckless abandon, pushed a bill through that he dubbed a stimulus plan. That plan was absolutely needed and if it was not passed the world would come to an end, or at least this is how Obama presented it.

This is where Obama and Dodd assumed the liability for the mess. AIG employees were not paid bonuses because the issue was not addressed. They were paid bonuses because it was addressed and Dodd made sure they could get paid. Dodd added an amendment to the stimulus bill that specifically allowed the bonuses to be paid. The members of Congress were well aware of the bonuses that were due and they were aware last year when all this was being worked on. They ignored that issue until Dodd put these words in the bill:

Crack down on bonuses, retention awards and incentive compensation:
Bonuses can only be paid in the form of long-term restricted stock, equal to no greater than 1/3 of total annual compensation, and will vest only when taxpayer funds are repaid. There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.

For institutions that received assistance totaling less than $25 million, the bonus restriction applies to the highest compensated employee; $25 million to $250 million, applies to the top five employees; $250 million to $500 million, applies to the senior executive officers and the next top 10 employees; and more than $500 million applies to the senior executive officers and the next top 20 employees (or such higher number as the Secretary determines is in the public interest). Fox Business (includes graphs showing who AIG donated money to. Now you know why Dodd added the amendment) [emphasis mine]

Dodd’s amendment allowed the bonuses to be paid. Let me write that again; Dodd added an amendment that allowed the bonuses to be paid.

Certainly the amendment had to be voted on so there is no excuse for people not to know that the bonuses were going to be paid. Obama pushed this bill through at light worker speed. The bill was over a thousand pages long and no one had time to read it before it was voted upon. Obama did not read it before he signed it. So what we have is a trail of incompetence.

Senator Dodd is now trying to get the money back. He suggested heavily taxing the money and that moron Chuck Schumer stated today that the new CEO of AIG had better convince the employees to return the bonuses or Congress was going to tax nearly 100% of it to ensure it got back to where it belongs “in the hands of the taxpayer.”

First of all, it will never get to our hands. Congress will spend it on something else. Second of all, why all this phony concern for taxpayers now? They had no concern for us when they passed the trillion dollar, pork laden, spending bill and they had no concern for us when they passed the omnibus and its 9000 items of pork. Why the righteous indignation now? And who does Dodd think he is to vocally oppose this when he added the amendment that allowed it to happen?

Obama and Dodd as well as all the other screamers (like Barney Frank and Chuck Schumer) are trying to cover up the fact that they screwed this up royally. They are now using the power of Congress to punish people who only got that to which they were entitled by virtue of a contract and a bill signed into law by Obama.

I don’t like the idea that AIG got the money and I don’t like the idea that these issues were not addressed when the original bailout was written and that they were not addressed correctly when the pork filled stimulus was crafted. But, the fact is, under the law, the people who received bonuses are entitled to them.

Another fact is that Obama, Dodd and the others are trying to put this on AIG when these morons knew this was going to happen. When the news broke and people started complaining these so called leaders all of the sudden acted like this was a shock to them. They acted like it was irresponsible and an affront to taxpayers when they all knew about it and they codified it; Dodd with the amendment, members for voting on it, and Obama for signing it.

Another thing to address is whether Congress can make a law that specifically taxes specific employees in one particular company. Does Congress have the authority to write a law that says that a certain group of people in a certain company must pay 90 or 100% tax on a specific bonus? I would imagine that this would be an issue for the Supreme Court to decide under the issue of equal protection.

If Congress can do this then what would stop them from deciding that that a certain job class or certain workers in other companies made too much money and then pass laws taking as much of that income as they wanted? This is a very important issue and it gets at the heart of just how much power Congress actually has.

If they screw these workers out of their bonuses (sorry folks but no matter how you feel about it, they are entitled to them) then they could be asking for trouble. Congress sunk 170 billion dollars in AIG because if AIG fails then the economy will follow it, at least according to those who pushed the bailout. What would stop AIG from saying screw it and closing its doors. What would stop them from just shutting down and causing turmoil? The government owns about 80% of the company now but the government can’t run it.

Speaking of owning 80% of the company, the entire issue shows just how wrong it was to bail them out in the first place. Government said they were buying up shares in companies in order to help them get back on their feet. We were told they had no interest in nationalizing these companies (at least no more than short term) and that government had no interest in controlling them.

Today Barney Frank said that we [the government] own 80% of the company and that it was time to exercise ownership and stop the bonuses from happening. This is nothing more than a push closer to socialism. Government tells you how much you can make and how much you have to give back. Government takes control of companies and decides what employees can or cannot do regardless of contractual obligations. Government erodes the freedoms that people enjoy and soon instead of building wealth government ensures that all of us are equally poor.

Those who voted for Obama, this is what you voted for. Those who wanted the bailouts, this is what you asked for. You have no right to complain and you have no right to be upset about what is taking place because you wanted this to happen.

As for those of you that are threatening the lives of AIG workers and directing your anger at them; you are wrong. Your anger should be directed at Obama and Dodd and everyone else who voted for the stumulus package. Dodd added the wording and Obama signed it into law. THEY KNEW ALL ABOUT IT FOR QUITE SOME TIME AND THEY ALLOWED IT TO HAPPEN.

Direct your anger at Congress and at Obama. They deserve your wrath.

As an aside, this is the second time not reading a bill has caused embarrassment. Obama issued an EO allowing federal funding of embryonic stem cell research and then signed the omnibus which specifically forbade using federal money to pay for it. He also signed the stimulus allowing the AIG employees to receive their bonuses.

One final point. If there are other companies with employees who had contracts for bonuses then they will be entitled as well. Dodd’s amendment was not specific to any company.

This is what happens when inexperienced, incompetent, self serving people run things. They gave us the financial meltdown and now this.

We need a do over. Let’s get rid of everyone in Congress and the Administration and replace them with competent folks.

**The Obama administration is claiming that it only found out about the bonuses a month ago despite media claims to the contrary. The bonus issue was known for quite some time by members of COngress and probably Geithner. Dodd certainly knew. He would have to know so he could take care of those who have contributed so much money to his campaign.

***Obama received 100 thousand dollars in donations from AIG

Also:
NewsMax

[tip]If you enjoy what you read consider signing up to receive email notification of new posts. There are several options in the sidebar and I am sure you can find one that suits you. If you prefer, consider adding this site to your favorite feed reader. If you receive emails and wish to stop them follow the instructions included in the email.[/tip]

Tags: aig, bailout, barney frank, contract, dodd, law, Obama, schumer, taxes