Obama’s Proxy War On AIG
President Obama, along with his Democrat and Republican cohorts, are economic morons.
Joining a wave of public anger, President Barack Obama blistered insurance giant AIG for “recklessness and greed” Monday and pledged to try to block it from handing its executives $165 million in bonuses after taking billions in federal bailout money. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”
OK, let’s discuss a bit about capitalism.
The people who are getting these bonuses are getting them because of contracts negotiated as part of their employment. They earned the bonuses on the terms of their contracts and AIG is contractually obligated to pay them their money. Let’s imagine, for example, that the Milwaukee Public Schools decided to withhold 1/3 of the teachers’ salaries because 1/3 of them failed at their jobs. Would that be OK? Or would we be obligated to stick with the contract? Yeah, I thought so.
Furthermore, bear in mind that many of the folks who earned these bonuses did so because they brought in revenue for AIG. Remember that the government pushed billions of dollars into AIG because they were “too big to fail.” Well, if they are too big to fail, shouldn’t we want them to succeed? And if we want them to succeed, shouldn’t we want them to incent their top performers to bring home the bacon? Of course, if we were living in a rational time.
In this case, we have a President who wanted to bail out AIG, but then turns around and bashes them – thus making them weaker. If I were a bit more cynical, I’d say that Obama is waging a war on business.
Oh, wait… I am that cynical.