Congress in a lather over “bonuses”

Posted by Marc Hodak on March 18, 2009 under Politics, Scandal | Be the First to Comment

I put “bonuses” in quotes for two reasons.  The first is a technical objection.  This use of the word bonuses is quite different from the idea of bonuses as most people are used to hearing it.  My mother-in-law in Missouri says it’s ridiculous for people who destroyed a company to be rewarded for doing so.  That’s an understandable interpretation of what is happening here, if one simply takes the headlines literally.  The story would be a lot less compelling if the headline were, “Executives collecting fixed payments from old contracts.”  Those are payments from contracts, by the way, that the government has known about, and protected in the recent stimulus law.

The second reason for the scare quotes is that this frothing by the government has nothing to do with bonuses, however they’re characterized.  This has to do with fear.  Congress is afraid that if they are seen as bad stewards of our money, the public will become less willing to let them grab another trillion of it.  Obama is afraid that if his administration is seen as rewarding failure, then his popularity will suffer, which will endanger the rest of his agenda.  In other words, our goverment officials are afraid the people will know the truth about what they are really doing.

Folks, the people already know that Congress wastes more per hour than AIG can pay out in a year’s worth of bonuses.  While we are easily manipulated by the outrage machine that is our political system, we eventually figure it out.

We will see how silly it is that Geither threatens to give AIG only $29.835 billion instead of $30 billion to “claw back” the “bonuses.”  (That’ll show ’em!)

We will eventually see the futility of government suing to get back these bonuses, as Barney Frank recommends, by spending tens of millions of dollars on a losing case whereby the bonus recipients will win additional awards for tortious interference.  And we will know that it is we who will pay for it all, even if we have forgotten that that we’re paying for a few extra minutes of grandstanding by Mr. Frank and his colleagues.  (Don’t worry; I’ll remind you.)

We will eventually recoil at the willingness of a government officials sworn to uphold the constitution passing and signing unconstitutional acts, like confiscation of money of a highly targeted group of individuals.  (I only wish it were equally unconstitutional to give money to highly targeted individuals.)

I don’t know what I’d prefer, Congress wasting time on $165 million of unwarranted (but legitimate) payments, or Congress actively looking for ways to spend more of our children’s money billions at a time.

UPDATE:  Here is an excellent summary of the actual contract under contention at Dealbook.