Volume 2, Number 3
The hue and cry over bonuses paid to AIG executives is both predictable and understandable. This is what happens when a private business allows the government to get into its knickers. But also blame the federal government for this situation. AIG should have been forced into bankruptcy, not been the recipient of $185 billion in taxpayer bailouts.
Certainly AIG itself bears most of the blame for its current plight for taking on risky bets on mortgage-backed securities. They bet and lost, and should have gone bankrupt because of their failed business decisions. But it was geniuses in the federal government, including Barney Frank and Chris Dodd, who are responsible for the anger that taxpayers feel over AIG. They decided that AIG was too big to fail, so they showered them with billions of our tax dollars.
Later when the firestorm of public protest erupted, Frank and Dodd tried to run for cover. When the bailout legislation was being crafted, Senator Dodd, acting on behalf of the Obama White House, specifically inserted language allowing AIG to pay the millions in bonuses that are now the subject of public scorn. Now, after making sure the bonuses could be paid, these same Congressional blowhards and administration officials find themselves the subject of a taxpayer firestorm of protest and are demanding that the AIG bonuses be returned, or taxed at confiscatory rates.
What has been the result of this sorry chapter? We’re out $185 billion, that much seems certain. Does anyone seriously believe that taxpayers will be repaid their investment? AIG will never be allowed to operate in a way that will attract outside investment and human capital. You know that sooner or later the government is going to be dictating how much executives will get paid, how the company’s products will be priced and marketed, and will control virtually every aspect of their operations, despite being wholly unqualified to do so. Who would want to work in such an environment? Who, other than politicians who spend someone else’s money, would invest in that deal?
The answer is nobody.
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If it wasn’t clear during the campaign, it should be by now. Barack Obama has embarked on a policy of unprecedented industrial nationalization that is paving a path to socialism. He essentially wants to nationalize the healthcare system; effectively nationalize the banking system; is going to pour billions more into General Motors and Chrysler while becoming the de-facto Chairman and CEO of those companies, determining how they operate and how their workers and executives are paid; and now, according to a report in the New York Times, he is considering regulations to control how financial executives get paid, including the bonuses that can be paid to them.
I’m sorry, but I honestly do not remember an Obama commercial that said, “I’m going to take over GM and force Chrysler to merge with an Italian company.”
President Obama says, with a straight face, that he doesn’t want to run GM. Yet he’s going to decide which of their brands survive, what plants will remain open, how much their workers and executives will be paid, how much bondholders will be repaid, and what types of cars they will produce. Obama has appointed an “auto industry task force” consisting of government bureaucrats who don’t know a thing about running a car company. Neither does President Obama.
It is amazing to me that the American people may be willing to sit idly by and watch this power grab and the attempted nationalization of industry after industry. The United States constitution does not give this president, or any president, this kind of power. We are not a monarchy where the King is able to redistribute industrial and private wealth to suit the King’s political objectives. When President Truman attempted to nationalize the steel industry in 1952, the steel companies went to court to stop him. In the landmark decision Youngstown Sheet & Tube Co. v Sawyer, the United States Supreme Court issued a stinging rebuke to President Truman and invalidated his seizure. It’s time that the Supreme Court be asked to stop President Obama.
GM is so financially dependent at this point on the government that it has little choice but to accept President Obama’s effective seizure of the company. But I sure hope that somebody with legal standing is readying a federal suit now to challenge the president.
And here’s an interesting and ironic bit of information: In the 1952 seizure of the steel industry, the General Counsel of the Steelworkers union urged President Truman to seize the plants. Fast forward to 2009 and the Obama Auto Industry Task Force. They have tapped Ron Bloom, a so-called expert in restructuring, to join the administration’s team. Bloom’s background includes a stint as an official with the Steelworkers.
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I am fresh back from the annual convention of the American Association of Political Consultants (AAPC), where Schubert Flint Public Affairs won an amazing 18 “Pollie” awards for excellence in communications and campaigning. Our awards included the prestigious “Public Affairs Team of the Year” (the third time we’ve won this award), “Best Television and Radio Campaign” in the nation for a ballot measure, and a special “Award of Excellence” from the nation’s cable television industry. As grateful as we are for having won these prestigious awards, I am perhaps more proud of our seven awards in new media categories, including our work with search engines, online fundraising, online advertising and use of social media. This is where the future of communications is headed, and we’re a leader in the movement.
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