Thursday, March 19, 2009

Bailouts, Bonuses, and the Greatest Magic Show on Earth

Are you angry about the AIG bonus payouts? I assume you are aware if you are reading this, but just in case. Basically, between September of 2008 and today, American Insurance Group has received roughly $175,000,000,000 (I'm using the full number for effect here) from the Federal government because it had decided that AIG was 'too big fail'. I'm not going to claim the knowledge or precognition to say that AIG was or was not so large and connected that a failure would have caused a cascade right across the economy and crashed everything. I will point out that Congress has no power to provide such funds nor to grant the power to do so to any body, public or private. Though that is not what is in discussion today you should keep it mind.
Last week, it was announced that AIG is paying out about $165,000,000 (or >0.1%) in contract bonuses to around 75 workers in its financial products devision. I have three immediate reactions to this news. First... How can I get me some that? I'd love to be a millionaire,and I'm not ashamed to admit it. Second, AIG was very, very stupid to pay these bonuses out without at least trying to find a way around it. And finally, so what?
Now, I'm sure that if you are angry about the AIG bonuses, you have to wonder why I am not. I do pay taxes, I often complain about government waste, and one would think that I wouldn't want a private company spending my money recklessly. And in all three cases you would be correct. However, please consider my counter arguments:
1) AIG was contractually obligated to pay those bonuses. Period. Thanks to the Federal governments inane choice to waste our money on a failing company rather than having that company go through a bankruptcy is the root cause of this issue.
2) Our government was aware that these bonuses were in AIG's employee contracts. In fact, language was inserted into both 'rescue' packages to protect bonuses just like these.
3) Are you seriously going to get upset over AIG spending $167,000,000 when our government has ransomed our futures to the tune of $3,400,000,000,000 this year alone? Just so you know, the 2008 pre-bailout budget was 2.7 trillion dollars. That 3.4 trillion in the current budget? Doesn't include nearly 2 trillion in 'rescue' we've had so far.
So yeah, my initial reaction to the whole AIG situation is a big 'so what?'. My reaction to the reactions of our so called leaders? The same phrase keeps going through my mind,'pay no attention to the man behind the curtain.' That's the phrase I keep hearing, but it doesn't really describe what our leaders are doing to us.
So, I've got a different question for you. Have you ever been to a magic show? You'll find that all magic shows have two things in common. First, they have a very attractive assistant in a skimpy outfit. Second, they have a bright white glove on their left hand. These two things are what makes the magic show work. They provide the misdirection.
You see, misdirection is the center of a magic show. The performer doesn't want you to really see what he (or his right hand) are actually doing as he sets up the trick. We play along when we watch the show; we're there to be entertained and that assistant really is very attractive. We all know that magic shows are illusion, we can't get upset when the magician tricks us. It's all in good fun and for entertainment. When we agree to being suckered, we can enjoy it. But I don't recall signing up for this magic show.
Now, I've been making the case that our so-called leaders are engaged in an act of misdirection. But from what are they trying to distract us? Therein lies the question. The answers differ depending on about whom you are speaking.
Congressman Barny Franks wrote the laws that created the sub-prime mortgage industry. He has reaped the benefits from such companies as Fannie Mae, Freddie Mac, and AIG. He was payed to keep looking the other way as these companies mortgaged our futures.
Senator Chris Dodd also wrote the laws that created the sub-prime mortgage industry. He also has reaped the benefits from such companies as Fannie Mae, Freddie Mac, and AIG. He is even the one who added the language protecting the AIG (and other) bonuses.
President Barack Obama has submitted a budget which doubles the size of the Federal deficit for the next year and will double the size of the Federal debt within ten years. These numbers are only accurate as long as you accept his accounting tricks that show reductions (such as claiming Iraq spending at 2007 levels for the next ten years, then canceling them to show savings). He has pushed through a $675,000,000,000 'down payment' on socializing medicine. He refuses to address the economy destroying unfunded mandates of Social Security and Medicare. He is trying to push through a cap-and-trade program that, irregardless of its costs, will put the Federal Government fully in charge of the energy back-bone of this country, and essentially in charge of the whole economy.
This is called fascism folks. Funny me, I seem to remember a war a couple of generations back. It was a big one, too. And the enemies in that war were fascists. And this is why your government is providing you with the greatest magic show on earth.
To keep you distracted from the real threat; complete and total take-over by the Federal Government. Now, you might be okay with this while Barack Obama and his ilk are in charge. But Federal power has a tendency to hang around, and who will we have after President Obama? And honestly, if he's willing to use straw-men like Rush Limbaugh and AIG to keep you distracted from his agenda, what else is he willing to do?

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