| The millions dolled out by A.I.G. in bonuses are chump change. The real issue is the billions they dolled out to their "counterparties," the big Wall Street banks, which have already received billions more in direct taxpayer bailouts. |
| This is the oldest slight-of-hand trick in the book. The corporate driven media is distracting the public by waving the A.I.G. bonuses up in the air with one hand, while the other hand is simultaneously picking billions out of our pockets. These bonuses ($218 million) represent around 1% of taxpayer money ($170 billion) that has been handed to A.I.G. so far.
All of these amounts are so mind boggling that it is difficult for most of us to see anything but a set of huge numbers. But the numbers are different. To illustrate: if someone you knew asked you for 73 cents, you'd probably hand it to them without any questions, or even a second thought. But if that person asked you for 566 bucks…well, you might come up with it, but you'd want a bit more information. The total awarded to A.I.G. so far amounts to around $566 for every man, woman and child in the U.S. The A.I.G. bonuses…a mere 73 cents. The public is getting all exorcised over the 73 cents, while the five hundred plus bucks is being looted. Let's keep our eye on the real issue. This article is in no way meant to justify these bonuses. That having been said, the current proposal to tax the money back is wrong headed for a number of reasons. It's important to keep in mind that most of the divisions of A.I.G. are still profitable and are on the up-and-up. While there is no justification for some of the disproportionate bonuses, a lot of those checks were reasonable sums that went to work-a-day people from those trouble free operations. And since we, the taxpayers, currently own 80% of A.I.G., we have a vested interest in seeing those divisions continue to operate profitably. Let's not cut off our nose to spite our face. On the other hand, most of the credit default swaps that were responsible for the huge debt that A.I.G. incurred (and that taxpayers are paying back) were fabricated by a division in England. Raising American taxes won't get that money back. Nor would it retrieve any of the bonuses paid in 2008, such as the $2.5 billion paid to Merrill Lynch employees…11 times the $218 million A.I.G. bonus amount. The only advantage to keeping this discussion alive will be to pave the way for overall upper income bracket tax hikes, which are sure to be part of the Obama plans in the future. The congress is trying to put the toothpaste back in the tube with this tax scheme. We need to accept that those millions are gone and resolve to fix the system going forward. So, if the real issue is payments to counterparties, then who are those counterparties? Where did all of that money go? Somehow Goldman Sachs, the recipient of $10 billion in taxpayer dollars via a direct bailout, somehow managed to usurp an additional $8.1 billion of the taxpayer money awarded to A.I.G. But wait, it gets even worse. A big chunk of our taxpayer funded donation to A.I.G. went overseas. Among foreign banks receiving U.S. taxpayer dollars via A.I.G, Société Générale, a French bank, received $11 billion, and Deustche Bank got $5.4 billion. |
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