Combs Spouts Off

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Faux outrage

Posted by Richard on March 19, 2009

The posturing, demagoguery, and expressions of outrage about the AIG bonuses continue unabated. Where was all this concern over self-serving and wasteful expenditure of tax dollars when Congress passed and the President signed the $410 billion omnibus spending bill containing over 8000 earmarks?

The President claimed even back during the campaign that he opposed earmarks, but he signed the bill anyway, promising earmark reform in the future. The administration argued that this bill was "inherited" from the previous administration, so why bother to try to clean it up? 

Well, the AIG bailout and AIG bonus agreements are "leftovers" from last year, too. The bonuses amount to less than 0.1% of AIG's bailout money, far less than the earmarks in the omnibus bill. Why so much concern over the former and so little over the latter? 

It's all hokum for the rubes and sheer hypocrisy. Investor's Business Daily outlined the true story behind the AIG bonuses, namely that the Obama Adminstration approved them and Congress authorized them: 

"In the last six months AIG has received substantial sums from the U.S. Treasury," Obama said after allegedly hearing about it for the first time. "How do they justify this outrage to the taxpayers who are keeping the company afloat?"

Well, they justify it by saying they had the administration's permission. The New York Times reports that AIG executives said they never would have proceeded with the bonus payments before getting approval from the Treasury and the Federal Reserve.

"We would never make any important business decisions without discussing them with our government managers and owners," one AIG executive is quoted as saying.

As Larry Kudlow notes in his column on the next page, "the Obama administration — including the president, Treasury man Tim Geithner and economic adviser Larry Summers — knew all about them many months ago. They were undoubtedly informed of this during the White House transition."

The fact is, these bonuses were made legal by the $787 billion stimulus bill that President Obama promoted and signed. A provision, now known as the "Dodd Amendment," was inserted into the bill by the chairman of the Senate Banking Committee, Chris Dodd, D-Conn. It exempts from any restrictions bonuses contractually obligated before Feb. 11 of this year.

Coincidentally, Sen. Dodd was AIG's largest single recipient of campaign donations during the 2008 election cycle with $103,000, according to opensecrets.org. Also coincidentally, one of the largest offices of AIG Financial Products, the division that concocted the goofy financial instruments that doomed AIG, is situated in Connecticut.

The second-largest AIG recipient, at $101,232, was the "choked up with anger" President Obama. If AIG gives back the bonuses, will the president give back these and other campaign contributions from troubled institutions?

Don't hold your breath, folks. The Democrats' dirty little secret is that most of the overpaid big shots who ran various insurance, banking, mortgage, and financial institutions into the ground are liberal Democrats and among the party's most generous contributors.

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