Lies and Diversions

The major news story of the day is the "righteous indignation" of politicians at the bonuses that AIG is paying to some of its employees after it took billions in bailout money. "How can AIG give millions in tax payer funds to it's employees when they've run the company into the ground?" is the general sentiment expressed by Washington.

Perhaps this discussion could benefit from a few facts that you won't hear from the "mainstream media" or from Washington:

• Washington has known for months that these bonuses were going to be paid.


• The bonuses are a contractual obligation of AIG.


• The bonuses are "retention" bonuses. A retention bonus is given to an employee that has been notified that he/she will be laid off but the company would like to have them stick around for a bit to help clean up loose ends. Without these bonuses, the employee would be off looking for other work instead of sticking around to aid in the transition to a smaller company.


• A provision of the bailout plan recently pushed through Congress by Senator Christopher Dodd, a Connecticut Democrat, exempted such bonus agreements from any restriction.


• This doesn't stop Dodd from feigning indignation and threatening to tax 100% of the bonuses (it's highly illegal to target private individuals for specific taxes, by the way).


• Christopher Dodd was the biggest recipient of campaign donations from AIG. The Obama campaign was second.

With the above information in mind, you might be wondering, "why would government officials be making such a huge sideshow out of this?" I can think of one reason: diversion.

1) Christopher Dodd's poll numbers are falling through the floor. He needs a distraction from his sweetheart mortgage deal from CountryWide (a company that is regulated by the committee that he chairs) and the little fact that he wrote the provision that allowed the bonuses in the first place.

2) Obama wants to push through more of his left-wing agenda. However, he is in danger of losing the approval ratings that allow him to easily get his way. Thus, this little brouhaha turns the public's anger away from him and onto those greedy evil capitalists. Political sleight-of-hand has always been his modus operandi.

3) Congressional leaders, whose approval ratings are currently somewhere between the Bubonic Plague and ambulance-chasing lawyers, need anything to divert the public's attention (especially after they just passed a 1,000-page bill without ever reading it).

Ignore the sideshows and keep your eyes on the one fact that stands unassailable: the government caused this entire mess, not the poor saps who work at AIG (who, by the way, are receiving death threats because of the heated rhetoric coming out of the government - way to go guys!).