Outrage Over the Phony Outrage In Congress Over AIG Bonuses

I'm outraged over the outrage being expressed by President Obama and Congress over the "discovery" that AIG executives were receiving more than $165 million in bonuses and that they're now demanding that the executives give back the money or that Congress will ram through a new tax provision to strip them of the money by imposing a 100% tax.

The rising congressional fury came as it was revealed that 73 AIG employees - from the toxic financial-products unit - snagged bonuses worth at least $1 million each, after taxpayers pumped in more than $170 billion to save the company.

With fury over the bonuses boiling over in every corner of the Capitol - and the White House revealing last night that President Obama didn't know about the payouts until Thursday, the day before the checks were mailed - lawmakers drew up plans to tax from 91 to 100 percent of the big payouts.

They pledged to act immediately to push the measure through Congress.

"If you don't return it on your own, we will do it for you," warned Sen. Charles Schumer (D-NY) in a speech.

Senate Majority Leader Harry Reid (D-Nev.) called the thought of executives keeping the bonuses "repulsive" and called it a sign of "greed and corruption on Wall Street."

Classy.

Possibly illegal.

And it's definitely two-faced. I don't expect Congress to give back their salaries for sending the economy into a tailspin and taking on such massive amounts of debt for porkbarrel spending and decades of social programs that have failed to achieve any of their goals (and the only solution being spending even more money because only money can solve the problems alleged).

Congress and the President knew that AIG would have to dole out these bonuses. They didn't do anything when writing out the bailout. At the time of the original bailouts, Congress could have required that the bailout money would not go to providing executive compensation or deferred compensation to its employees. That would have been acceptable.

Trying to tax the bonuses out of existence is a poor idea, and will likely slam everyone in the industry because the legislation needs to be sufficiently broad so as to avoid Constitutional law arguments.

People who are busy complaining and showing their outrage over the bonuses and claiming that this rewards incompetence ought to remember what they were saying when the same people - particularly in Congress were quick to provide hundreds of billions of dollars in bailouts to reward incompetence by propping up businesses that were failed or failing - including the automakers, financial giants like AIG, Citibank, Washington Mutual, Goldman Sachs, etc.

The bailouts reward failure.

The homeowner mortgage bailouts (both of them) reward failure by allowing borrowers who benefited from increasingly lax lending standards imposed on the banks by Congress and the President for years on end in the name of affordable housing to renegotiate their loans on terms more favorable than those people who scrimped and saved and did everything possible to continue paying their bills on time.

Do these people have short memories, or are members of Congress simply engaging in the typical demogoguery that one has come to expect? I would bet the latter.

I'm not alone in thinking that this is a whole bunch of faux outrage. Michelle Malkin also slams Congress and the President for their asinine statements. She also points out that many of the same people in Congress complaining about the bonuses aren't exactly clamoring to give back the AIG campaign contributions or roll back the automatic Congressional pay raises. Funny how that works.

And no one seems to know where all the hundreds of billions in bailouts have gone, let alone the $150 billion provided to prop up AIG to keep it from failing (which it still is). We're finding that the collapse is still occurring, just on a far slower pace that continues to require attention. And taxpayers continue to get soaked by a flawed policy that never should have been considered in the first place.

UPDATE:
Redstate and Instapundit also weigh in.

UPDATE:
Congress will be grilling AIG CEO Edward Liddy today. I'm sure that they'll try and make him rend garments, wear sackcloth, and tithe large sums to the Treasury, but in the end, Congress knew that they created this mess, and now they're putting the onus on AIG to fix it.

UPDATE:
Don Surber points out that it was just days ago when Press Secretary Robert Gibbs came to the podium to assure all Americans that the AIG money was being spent properly. When asked on March 2, 2009, Gibbs said yes. Now? Apparently Obama thinks there's political leverage to be had throwing AIG and contract law under the bus. GOPers are right to raise hay over this. What did the Administration know, and when did they know it. And why are they continuing to filet AIG when no one is bothering to do the same to Freddie Mac, even though they've got the same bonus provisions?

UPDATE:
Fannie Mae is also in on the retention bonus deal. They became a wholly owned subsidiary of the US government courtesy of their bailout/destruction of the real estate lending business, and yet where is the scrutiny of that organization by Congress? Again, the compensation packages are chump change compared to the hundreds of billions sunk by taxpayers to bail out these entities and businesses from their bad business decisions (and encouraged to do so by Congress).