Feigned Disgust at AIG

Corporate executives are ultimately responsible for only one thing: pleasing their shareholders. There are moral obligations, too, of course. And businessmen who pursue profits with everything else be damned typically reap what they sow. But shareholders have the final say in executive pay because they can replace the executives.

In the case of AIG, we now are the shareholders. The American taxpayers own nearly 80% of AIG. We have pumped nearly $180 billion (that's $180,000,000,000.00) into AIG to bail it out of the poor decisions it, through its executives, made. That means we have the right to be outraged at the $165 million (that's $165,000,000.00) in "retention" bonuses AIG/Our Company recently paid its executives. Our tax dollars that we generously gave our battered and beleaguered company are being used in part to pay poorly performing, failing executives outlandish bonuses. Calling it an outrage is a gross understatement.

There are several people, however, who have tried to get out in front of this protest parade. They express disgust and deep anger at these developments. But, instead of letting them lead our parade, we should trample them under foot for their roles in making it all happen. Here are just a few of them.

First and foremost is the Shareholder-in-Chief Barack Obama who yesterday lambasted AIG and expressed shock and anger. Candidate Obama, while waffling on whether to support the AIG bailout in September 2008, unequivocally stated that "It must not bail out the shareholders or management of AIG." Fast forward 6 months and, surprise!, that's exactly what is happening. He can blame the Bush Administration all he wants for bequeathing all the world's problems to him, but the fact is AIG management is getting bailed out on Obama's watch. Meanwhile, Obama is proposing a budget with a projected deficit of $1.75 trillion (that's $1,750,000,000,000.00), or about more than 10,000 times the amount the AIG executives got. Who's wasting more of your money? By the way, still no word on whether the Shareholder-in-Chief--the second highest recipient of campaign contributions from AIG in 2008--will return any of the more than $100,000 he received last year.

Second is Sen. Chris Dodd, D-CT. Dodd is a government-employed, duly elected welfare queen, having already, for example, gotten a sweetheart mortgage from troubled Countrywide that you and I couldn't get. Recently we learned that Dodd's amendment to the $787 billion "stimulus" package exempted from a restriction on executive pay the very AIG bonuses he roundly criticizes. Could the fact that Dodd was just ahead of Obama in AIG 2008 campaign contributions have anything to do with it? Naaaah. It was just a co-inkydink. Or maybe leprechauns clandestinely inserted the exemption in after Dodd put forth the amendment.

Third on our list is Sen. John McCain, R-AZ. At the time Candidate McCain cut off his campaigning to return to DC and fix the financial crisis, I thought it was a gutsy gimmick and applauded the move. Then, of course, he decided to support the $85 billion AIG boondoggle bailout (that's $85,000,000,000.00) and the $25 billion automaker bailout (hattip: Michelle Malkin), and lost any remaining "maverick" luster.

Rep. Barney Frank, D-MA leads the list of also-rans but I simply don't have enough space to cover his involvement in this debacle.

Now we have Obama claiming he'll use "every legal avenue" to get the bonus money back. New York AG Andrew Cuomo is also looking at the situation. Have these guys--both allegely accomplished lawyers--ever heard of contracts? AIG may be contractually obligated to pay these bonuses. You don't think the AIG employees who were to get the bonuses wouldn't sue AIG in a New York minute if they didn't get paid? Oh, the Shareholder-in-Chief and his outraged pals will try to "undo" the contracts now, and they might eventually succeed. But you mean to tell me these clowns didn't think to put restrictions on bailout funds when they were debating and proposing them? Someone should have sat down with whoever was running AIG and said, "Look, we'll give you the money but we're building in provisions to ensure you don't squander it on executive bonuses, spa trips, and other such stuff. If that's not acceptable, then you get no cash."

And some in Congress (including Dodd) are proposing to tax the snot out of those bonuses with at least one congressman saying they should be taxed at 100%. While we're throwing out contract law, why not toss the Constitution too. Ex post facto laws? Nobody really knows what that means anyway, and people are so mad at the AIG executives that nobody will care if they get screwed.

Politicians feigning disgust and outrage is nothing new. It's just so obviously self-serving, hypocritical, and smarmy, especially in these difficult times. Obama's "change" mantra doesn't echo as loudly anymore. He sounds more like Captain Renault in Casablanca: "Shocked! Shocked!" to find out these shenanigans have been going on right under his nose.

I don't know who is more disgusting: the AIG executives who got bonused with our bailout money, or the politicians who took campaign contributions from AIG, eagerly approved their bailout money and set up the mechanisms to be misused. A pox on all of their houses...especially the one Dodd got that sweetheart deal on.