Flash to Congress: You, our esteemed representatives, are not supposed to be the ones brandishing the pitchforks. In fact, the scariest times are those cases where public outrage sparks you enough so that you go into one of your periodic lemming-like frenzies, becoming in the process a spectacle providing nothing so much as comic relief.
The latest example, of course, is the outrage that rang through the House chamber as the public foamed at the mouth over the $165 million in retention bonuses paid out to AIG executives.
One after another of our congressmen and women could not wait to jostle a colleague out of the spotlight so that their constituents, too, would know that by cracky! and by golly! they were not going to stand for such shenanigans one minute–no make that one second–more.
Beyond this, the comic relief was the solution that the House came up with and for which it voted overwhelmingly–tax those bonuses at the rate of 90%. I can’t be the only one, and I know I’m not, who finds this so ridiculous and cartoonish that it has trimmed even the already scant respect I have for Congress by a few more degrees.
I will admit that I too was outraged when the news of the bonuses broke in the New York Times and crashed on the steps of Capitol Hill in the days after. But I have to say I was even more disheartened by what came in its wake.
The circus that followed is symptomatic of what ails this country. So many people, and that includes politicians, would rather be swept away by a diversion than deal with what we need to do to get back on track. In this, the public is ably abetted by the mainstream media, which is only too happy to go chasing after the easy stories if they’ll raise ratings or sell more copies.
These diversions often revolve around either a scapegoat or someone being unduly idolized. No doubt about it, AIG has become the scapegoat for the financial mess we’re in. In particular, the financial products unit is seen as the crucible of the ongoing debacle, so when the retention bonuses came to light and so many, if not all, of them were for employees of the financial products unit, well, it was, as they say, a perfect storm. Of diversion.
Now, it’s true that $165 million is a lot of money. But it pales in comparison to the amounts received by firms who were made whole in deals they had with AIG, and at taxpayers’ expense. To me, what really stinks far more than the $165 million is the $12.9 billion that Goldman Sachs has received from AIG’s tens of billions of bailout funds. Or the $6.8 billion Merrill Lynch got. Or the nearly $12 billion each that’s been shelled out to France’s Societe Generale and Germany’s Deutsche Bank.
According to reports, these big trading partners of AIG were made whole on deals they had with AIG with nary a hint of factoring in any discount in the settlement. So, in essence, while they may have taken really risky bets, these well-connected financial companies did not have to pay any price at all for losing on those bets in the end. We, the taxpayers, made them whole through the bailout funds shoveled to AIG. No wonder there was such secrecy around the whole situation for months, and only when the pressure got really intense, were the names of these trading partners divulged.
Where’s your outrage over this, Congress? And where’s the media?
Now we hear that poor Goldman Sachs, which took some $10 billion in TARP funds last year, is upset and simply chafing to give it back so that the era of huge bonuses for its partners can resume. You know what, Goldman, before we taxpayers let you return the $10 billion, we should insist you also give back a big chunk of the $12.9 billion.
Now that’s something I could pick up a pitchfork for! To the castle!