Let me get straight to the point. If the Obama administration gives AIG the additional $30 billion that it says it will, then it is the Obama administration that is using taxpayer money to pay hundreds of millions of dollars in bonuses to AIG’s employees. So, if the Obama administration is really that outraged over the AIG bonuses, I recommend that they do not give AIG the money. It is that simple.
Now, if you hear that the $30 billion is absolutely necessary for the health and survival of the economy and must be given to AIG, then I submit that all the outrage we have seen today about the AIG bonuses is fake.
It is time for the Obama administration and the Democrats to put up or shut up.
AIG says that they are contractually obligated to pay these bonuses. If that is the case, then let us leave AIG to fulfill its contractual agreements on its own.
If these bonuses must be paid, here is what I suggest. Let AIG fail and fall into bankruptcy. We have already paid $175 billion to AIG and we effectively own 80% of AIG. It is time to make it official.
Over the weekend, AIG revealed what it had done with the $175 billion it was given. It released a list of counterparties that received funds from the AIG bailout. Some of the banks on AIG’s list are the very same banks that received federal bailout funds directly under the $750 billion TARP program. In other words, these banks collected funds from the American taxpayer on distressed mortgage backed securities insured by AIG. At the same time, they took money a second time from the US taxpayer directly via TARP for their losses on those very same mortgage backed securities. In layman’s terms, these banks double dipped. It should then come as no surprise that these banks are able to pay big bonuses to their executives while American taxpayers foot the bill with their precious tax dollars. This, as millions of American are losing their homes.
I say let these banks fail. Let AIG fail. Not a single dime more from the American taxpayer should go to these banks. It is well past time to nationalize these institutions and do major surgery. Without nationalization, you will get banks whining about government intrusion into their cushy setups.
While Americans are losing jobs by the hundreds of thousands each month, we do not need to hear from AIG or other Wall Street institutions why “retention bonuses” are so important. We certainly do not want American taxpayer dollars funding these corporate welfare programs.
It is time to shut down the gravy train.