Confidence in our governing officials is dwindling to a dangerous low and with the latest AIG business, is it any wonder why? The finger of blame is quickly being pointed by the Republicans, who are eager to shout that it's the Democrats in Congress and President Obama who are to blame. Republicans didn't sign the Bailout Bill, the Dems and Obama did.
A clause in the bailout bill more or less spells out the right for AIG to dole out bonuses that had been promised on or before Feb. 11, 2009. According to Republicans, the Democrats put that clause into the bill and they are the ones that voted it through. Oddly enough, the same politicians responsible for the clause are now claiming outrage at the AIG bonuses paid to executives and the like. Responding to an outraged public, those truly involved are quickly glazing over or outright denying their role in this debacle.
In an op-ed article, "American Mob Rule" from the National Review Online, Victor Davis Hanson is quick to point out that while Obama claims to be outraged, he alone signed the bonus provisions into law. Hanson goes on to site that "Those who shouted the loudest for the heads of the AIG execs had the dirtiest hands." Hanson makes a valid argument regarding how the bonuses came to exist in the first place. I can't help but wonder, why don't these outraged politicians give back the money they received from AIG during their campaigns and tenure in Congress? Keen to demand AIG give back funds they were legally entitled to, why don't these politicians follow suit and give back the funds they were so eager to accept from AIG?
Instead of doing anything so silly, Congress would rather go to a frightening extreme in an effort to recover a very small fraction of the bail out money.
The government is now reneging on a promise made and demanding a pay back. Drastic measures of unprecedented taxation are dangerously close to becoming law. Likely an unconstitutional law at that. Richard Epstein of the Wall Street Journal expresses his concern when he notes, "The AIG bonuses were made pursuant to valid contracts entered into before the receipt of the bailout money. Special taxes on some forms of income (but not others) and retroactive taxes put in place after business transactions are complete both merit strong condemnation." Responding to what Hanson and others describe as a mob rule, Congress is jumping out of the frying pan and into the fire.
Americans need to take a step back, and look at what is really at stake with this outcry. Do we really want our government to renege on a legally binding contract? Is that the message that we want to send to our own people, let alone to the other countries that watch, model and scrutinize our every move? I don't think so.
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