Wednesday, March 18, 2009

AIG: It may be Obama's mess to clean up, but it isn't his fault

Many people, including me, are royally ticked off over the over $165 million in bonuses that AIG has given out to executives at the unit of their business that most contributed to AIG's fall.

While AIG cratered under the Republicans' watch (or to be more accurate, their "not-watch") and AIG's bailouts began last year, every Republican has pointed fingers not at themselves, or at the Bush Administration's utter contempt for common-sense regulatory oversight, but instead at President Obama, Treasury Secretary Tim Geithner, and Democrats in general.

From the beginning of the Bush Administration until the end of his time in office eight years later, the Bushies, with the enthusiastic complicity of their Republican accomplices caucus in Congress, a concerted effort was made to undermine regulations and laws restricting business.

It was open season on the average working American's freedom and economic security while corporate executives and the already-wealthy to feather their own nests in ways that that socialized risk (witness the bailouts) and privatized profit (witness the bonuses paid out of taxpayer bailout money).

Now that the financial industry's house of cards has been blown down by the winds of economic reality, the Reps are attempting to affix the blame for it everywhere except where it belongs - to the executives themselves, the ones who allowed their inveterate greed to rule the day, and to their cheerleaders, the 43rd President of the United States, his Administration, and their lackeys in Congress.

Today's hearing of the House Financial Services Committee concerning the issue, featuring current AIG CEO Edward Liddy, highlighted the likes of Republican Reps. Hensarling, Royce, and more blaming the current Administration, especially Geithner, for the bonuses, while blithely ignoring the long history of not-so-benign neglect and actual malice on their own part that led up to the collapses of the financial industry and the American economy.

Let me make my point, and make it clearly -

Blaming Barack Obama and his Administration for a mess that they inherited is not only predictably partisan (something which I can frequently, and justifiably, be called :) ), but it's the sort of foolhardy revisionist thinking that will lead to history repeating itself.

It's time to cut through the BS, deal with the misuse of public funds (which the bonuses most certainly are), and ensure that it doesn't happen again. I don't even think that it is necessary to excoriate the Bushies (unless something criminal and actionable can be proven, then we should nuke 'em...figuratively speaking :) ). Affixing blame is less important than determining exact what went wrong, both with AIG and the bail out, and figuring out ways to prevent it from happening again.

Note:

Some Republicans, like AZ's own Sen. Jon Kyl, have even gone so far as to rationalize paying the bonuses while calling the elected officials who have criticized the bonuses as "demagogues." (Huffington Post)

When I see behavior from elected officials that seems unexpected (right now, criticizing AIG is about as politically safe a move as there is in America), I tend to think to myself "Follow the money." That inspired a little research on my part into AIG's political contributions.

Turns out that AIG is bipartisan in its largesse. According to OpenSecrets.org, they've given $9.3 million since 1989, evenly splitting that between the two major parties. They're not dumb about it, as during the last election cycle they gave roughly 2/3 of their contributions to Democratic candidates. Of course, that just means that when the Reps were in power, they were the recipients of more money (logic: if receiving 2/3 of the contributions during the last presidential cycle brought the Dems even with the Reps, that means that the Reps had a significant lead before 2008).

Looking into Kyl's support for AIG, I found that he has received at least $15K from AIG's PAC and employees since 1998, which sounded significant.

Then I found that John McCain has received over $150K for his various campaigns.

Imagine how loyal Kyl would be if they just paid him like they've paid McCain and a few others?

Note2: My search through FEC records was a cursory one. I didn't try tracking payments to non-AIG PACs that in turn gave money to Kyl or McCain, nor did I do ZIP code or address searches to figure out how much was given by AIG spouses or family members who don't show up as AIG employees.

Later...

3 comments:

testcase said...

Autoworkers making $57K a year need to accept wage and benefit cuts but incompetent executives must get their bonuses!!

Thane Eichenauer said...

I have to disagree with at least a bit of the blame leveled and avoided above. I don't dispute that the government has been doing a far too good a job of yelling wolf, then feeding the wolf, then acting contrite when someone points out that we have been feeding the wolf prime steak instead of hamburger.

There has been a considerable number of Democrats in Congress who, if they were exercising oversight and the flexing the power of impeachment as they should have over the last two years, could have forced any part of the executive department to regulate as well as obey the constitution.

While I agree with the common sentiment that the Bush administration has been most deviously contemptuous of the constitution and the Democrats in the house having declined to present any impeachment I have to say that I find the Democrats to be complicit in the institutional incompetence.

cpmaz said...

Testcase - you aren't the first to notice that particular bit of hypocrisy.

Thane - Believe me, I'm not giving Congressional Dems a free pass on this one; too many of AIG's bribes...errr..."campaign contributions" went to Dems.

I'm just happy that I didn't find much going to AZ Dems.