AIG Bonus Outrage... but are you directing it at the right people?

AIG employees got bonuses, and the country is outraged! And well you should be, but not at anyone who works for AIG. Save your outrage for the right people...

When AIG was given taxpayer money (always remember that the Government does not have any money to give out to anyone, they are merely stewards of your money to be spent for the common good) as part of the $787 billion bailout package, there was a specific amendment inserted by lawmakers at the Capitol that excluded limiting bonus payments on pre-existing contracts, the so-called "Dodd Amendment." The above article gives a good breakdown on the rules in place now for any payouts going forward.

But now these employees, who signed contracts prior to this mess, and are merely being compensated according to those contracts, have a huge target on their backs from Congress, the press, and much of the public. But there are several things to understand:

This 800 page spending bill was passed without the chance to be read or reviewed by anyone - the call was "we have to pass this now, you don't need time to read it!" From introduction to passage was literally 1 day. I read fast, but not that fast. But now, responding to public outcry fueled by media coverage over the bonuses, lawmakers want to retroactively tax the bonuses at 90% rates. After other state and federal taxes, many employees would owe more in taxes than they would get on the bonus; the bonus would actually cost them money.

As if that wasn't enough, ACORN helped sponsor a protest tour of the homes of the people who received the bonuses:

http://www.courant.com/news/local/fc/hc-aig-tour-bus-0322.artmar22202310,0,1283060.story

ACORN, per it's own website, admits its ties to our President, specifically endorsing him for the Presidency: (while denying any wrongdoing in its voter registration drive, which has been challenged in court)

http://www.acorn.org/?id=17856

Here is where MSNBC, no conservative bastion, reviews ACORN's record:

http://deepbackground.msnbc.msn.com/archive/2008/10/14/1544574.aspx

Notice how CBS doesn't even mention ACORN in this article on the subject at hand:

http://www.cbsnews.com/stories/2009/03/21/national/main4881366.shtml?source=RSSattr=Business_4881366

So in other words, you have a group that does federal work organizing a protest against private citizens at their homes, and at whom the government is attempting to impose a very specific retroactive tax. You might still be saying "Yahoo! It is high time to stick it to the rich!" at this point. With media, government and some private citizens all aiming their wrath at a small group of citizens, why should you be concerned?

Let's break this down again. The government rushed legislation through that they did not even read, nor understand. Private citizens who had signed contracts got the money committed to them in the contracts, that the government specifically said was fine, in the legislation the government didn't read. Then government had the audacity to get mad at the people taking those bonuses (even though they specifically allowed it), and after the fact they changed their minds and decided to tax the money so they would get it all back, and then some. Today it is AIG, but what population group will the government next target for the "public good?"

And if that question sounded dangerously paranoid to you, look at the power for which Timothy Geitner, Secretary of the Treasury, is now asking for:

http://money.cnn.com/2009/03/26/news/geithner.house.fortune/index.htm?postversion=2009032611

This boils down to the government seizing "too-big-to-fail" non-banking firms before they fail. This should scare you. Combine this with a mindset that thinks the end justifies the means, and you have the government seizing whomever them deem necessary at their discretion and with no recourse for the seized.

Many AIG employees are giving the bonus money back, because it really isn't worth the hassle. And that makes a 90% tax into a 100% tax, with that tax having been gained through intimidation by both government and media.

And so you absolutely have every right to be outraged... just not at AIG.