LETTER: Forget the working man: Bonuses were legal

American International Group was a huge and highly successful insurance and financial services company. It was brought down by its top management and the foolish actions of one of its divisions. Most, if not all of the people responsible for the company going broke are gone and have been for some time.

President Obama and the Congress decided the company was too big to be allowed to fail, so they loaned it a huge amount of taxpayer money to keep it out of bankruptcy.

They also asked a man named Edward Liddy to come out of retirement to help his country. He agreed to do so, and, I believe he is being paid $1 (one dollar) a year for his services.

The people who had caused AIG’s collapse had scurried away, but that left many of the highly qualified and talented people who had been running the company’s successful divisions. AIG was a sinking ship, and Liddy realized the best of those people would no doubt resign and seek more stable employment.

They needed those people to stay and help turn the company around, so they offered them contracts to assure them they would be treated fairly and be paid for their work. The company was struggling, so some of them followed Liddy’s lead by accepting $1 a year in salary.

All of them were assured they would be paid a “bonus” but that seems an odd word for a lump-sum payment to those who had been working for $1 per year.

These employment contracts were perfectly legal, and were approved by government officials, including members of Congress, the Treasury Secretary, and probably President Obama. The employees lived up to their half of the bargain, and many turned down other job offers to do so.

No doubt there were some bonuses paid to executives who do not fall into this group, but their bonuses were also paid to fulfill contractual obligations. Probably the only way to avoid paying them would have been declaring the company bankrupt, something the government had decided was not an option.

All that is easy enough to understand, but the real problem goes much deeper and is much more serious.

Americans are angry about the problems we face, and they should be. But that anger has been deliberately misdirected.

We should be angry at the people who caused the problem. That would consist for the most part of members of Congress — people like Barney Frank, who ignored the mess some of his friends were making at Fannie Mae and Freddie Mac, creating the real root of our problems.

But these old politicians are smart. They know they should be the object of our anger, and that the best way to avoid it is by making us angry at someone else instead.

So they rush to the microphones to direct our ire toward the people who were paid bonuses at AIG and all the “greedy” and “evil” people on Wall Street.

Sadly, the plan is working and liberal writers who fall for the scam are helping it along.

There is no shortage of evil or greed in corporate America. Many executives have been paid outrageous amounts they clearly didn’t need or deserve. That would include those who ruined AIG, General Motors, Chrysler, Citibank and the other companies the taxpayers are (perhaps foolishly) trying to bail out.

But the truth is they are no worse than the smug politicians who tell us they are going to save us by spending all our money and that of children not yet born.

Look, for example at Rep. Charles Rangel. He was so “furious” that he sponsored the recent legislation allowing the government to seize 90 percent of those legal bonuses paid by AIG with retroactive taxes. Of course all that hoopla helped divert attention from the back taxes he owes and his part in the mortgage mess bought about by forcing banks to loan money to people who could not or would not pay it back.

Senator Chris Dodd said he was outraged by “Wall Street greed” in an attempt to divert attention from himself. Dodd is the one who inserted the protections under which those bonuses were paid. He also took more AIG “political contribution” money than anyone else in Congress.

As for President Obama’s outrage at all the greed it should be noted that he alone signed the bonus provisions into law.

And, he was also happy to accept $100,000 in AIG contributions during his presidential campaign.

Stirring up the people’s anger is a political tactic dating back at least to ancient Athens.

We even have a word for those who do it: demagogue (a person, esp. an orator or political leader, who gains power and popularity by arousing the emotions, passions, and prejudices of the people.”).

Washington’s demagogues are encouraging us to scream for the blood of corporate executives, so as to avoid our screaming for theirs. Some have even furnished the names and addresses of bonus recipients so that the mob could picket their homes and harass their families,

The demagogues are, in effect, stirring up mob rule, the very thing that would destroy this great republic.

Sincerely,
Myles Godfrey
Winder