AIG Bonuses

One of the hottest stories in the past couple of weeks has been the AIG bonuses and the fact that tax payer dollars are being used to fund these bonuses. Although, their are several things morally and ethically wrong with using the bail out funds to pay these bonuses many are missing the bigger picture.

The AIG bonuses are contracted bonuses. If the federal government hadn't wanted the bailout funds to be used in this manner it needed to have been stated so in the stimulus package. Interestingly enough, Senator Dodd seen to it that the bailout funds would be used for such purposes, by having a provision in the bill which permitted the funds to be used in this manner. The problem that I have with the populist appeasing members of congress who are now objecting to this payout is that if they had actually read the bill before they voted for it, this wouldn't be an issue. Or would it?

Nowadays, it is rather common to see politicians use populist sentiment to gain a vote or two here or there. They are rather quick to jump on the side of popular opinion, only when it seems to benefit them the most. In this particular case, we have seen Senators, Congressmen, Governors, Attorney Generals and yes even the President himself denounce this travesty of justice. By doing so they are essentially painting the AIG executives as "the evil greed mongers" and diverting the eyes of the populace away from the real enemy, the government itself.

I personally am opposed to tax payer dollars being spent on huge corporate bonuses. However, I respect the law of the land and the fact that these executives had contracts with AIG. These contracts are guaranteed and according to the Constitution of the Untited States the federal government does not have the right to void such a contract. Our founding fathers were very much aware of the fact that if the central government could void contracts between corporations, companies and persons that in essence contracts would be worthless and the free market system would not be permitted to function properly. They got it then, but today's politicans don't get it!

In addition to the fact that these contracts are legitimate and that AIG is bound to honor the contract it is also important for us to understand that by accepting the "bailout bonus," these executives are NOT BREAKING THE LAW! We might disagree with the ethics of the entire situation, but we must understand that if we suggest or permit the federal government to EXTORT or force these persons to return the funds or tax all of the funds back from them, that we are in essence granting our government the right to VIOLATE any law that it so chooses to do. We are also inviting the federal government to violate our rights as citizens and are essentially giving them permission to do so. We need to evaluate our thoughts before we begin crying for justice. If violating a persons rights, by taking this money from them, despite the fact that they have not broken a law, is the justice that we are wanting, we might find ourselves beggin for mercy at the hands of a power mad government in the future.

In closing, I will remind you that when you examine closely the failings of AIG you will find out that the failures and mistakes were not all brought on by an out of control executive, but rather by an over-regulating federal government. The federal government created this monster beginning in 1994 and it has progressively forced these executives to insure sub-prime loans, initiate quotas and a bonus system of rewarding those who met those quotas, insure loans to low income and minorities who financially did not qualify for a loan as well as increase the percentage of "bad loans" required to a whopping 56% of all loans insured.