Obama And Dodd Are To Blame For AIG Mess
Mar 18, 2009 Political
There is a big uproar about the retention bonuses that were paid to AIG employees after the company received over 170 billion dollars of bailout money. There are a lot of players involved but Barack Obama and Christopher Dodd are the primary culprits in this mess. More on that later.
The idea of bailing out AIG or any other company did not appeal to me and I was against it from the start. There are many people who felt that we had to bail the companies out to keep the economic foundation from collapsing. To you folks who wanted this, you got what you deserved.
The government, that is the taxpayer, should not be bailing out companies. They make it on their own or they fail and someone else takes over. By allowing government intervention we have opened a Pandora’s Box. All that happens as a result of the government sticking its nose where it does not belong is that things get even more screwed up. Very few of the people in Congress have any experience actually running a business so this, coupled with the speed with which the first bailout was passed, was a recipe for disaster and a disaster it was. The people in Congress (along with the Bush administration) who wrote the bailout bill failed to provide oversight and they failed to ensure that there were strict guidelines as to how the money could be spent.
The Obama administration took over and he asked for more money to be released. He also, with reckless abandon, pushed a bill through that he dubbed a stimulus plan. That plan was absolutely needed and if it was not passed the world would come to an end, or at least this is how Obama presented it.
This is where Obama and Dodd assumed the liability for the mess. AIG employees were not paid bonuses because the issue was not addressed. They were paid bonuses because it was addressed and Dodd made sure they could get paid. Dodd added an amendment to the stimulus bill that specifically allowed the bonuses to be paid. The members of Congress were well aware of the bonuses that were due and they were aware last year when all this was being worked on. They ignored that issue until Dodd put these words in the bill:
Crack down on bonuses, retention awards and incentive compensation:
Bonuses can only be paid in the form of long-term restricted stock, equal to no greater than 1/3 of total annual compensation, and will vest only when taxpayer funds are repaid. There is an exception for contractually obligated bonuses agreed on before Feb. 11, 2009.For institutions that received assistance totaling less than $25 million, the bonus restriction applies to the highest compensated employee; $25 million to $250 million, applies to the top five employees; $250 million to $500 million, applies to the senior executive officers and the next top 10 employees; and more than $500 million applies to the senior executive officers and the next top 20 employees (or such higher number as the Secretary determines is in the public interest). Fox Business (includes graphs showing who AIG donated money to. Now you know why Dodd added the amendment) [emphasis mine]
Dodd’s amendment allowed the bonuses to be paid. Let me write that again; Dodd added an amendment that allowed the bonuses to be paid.
Certainly the amendment had to be voted on so there is no excuse for people not to know that the bonuses were going to be paid. Obama pushed this bill through at light worker speed. The bill was over a thousand pages long and no one had time to read it before it was voted upon. Obama did not read it before he signed it. So what we have is a trail of incompetence.
Senator Dodd is now trying to get the money back. He suggested heavily taxing the money and that moron Chuck Schumer stated today that the new CEO of AIG had better convince the employees to return the bonuses or Congress was going to tax nearly 100% of it to ensure it got back to where it belongs “in the hands of the taxpayer.”
First of all, it will never get to our hands. Congress will spend it on something else. Second of all, why all this phony concern for taxpayers now? They had no concern for us when they passed the trillion dollar, pork laden, spending bill and they had no concern for us when they passed the omnibus and its 9000 items of pork. Why the righteous indignation now? And who does Dodd think he is to vocally oppose this when he added the amendment that allowed it to happen?
Obama and Dodd as well as all the other screamers (like Barney Frank and Chuck Schumer) are trying to cover up the fact that they screwed this up royally. They are now using the power of Congress to punish people who only got that to which they were entitled by virtue of a contract and a bill signed into law by Obama.
I don’t like the idea that AIG got the money and I don’t like the idea that these issues were not addressed when the original bailout was written and that they were not addressed correctly when the pork filled stimulus was crafted. But, the fact is, under the law, the people who received bonuses are entitled to them.
Another fact is that Obama, Dodd and the others are trying to put this on AIG when these morons knew this was going to happen. When the news broke and people started complaining these so called leaders all of the sudden acted like this was a shock to them. They acted like it was irresponsible and an affront to taxpayers when they all knew about it and they codified it; Dodd with the amendment, members for voting on it, and Obama for signing it.
Another thing to address is whether Congress can make a law that specifically taxes specific employees in one particular company. Does Congress have the authority to write a law that says that a certain group of people in a certain company must pay 90 or 100% tax on a specific bonus? I would imagine that this would be an issue for the Supreme Court to decide under the issue of equal protection.
If Congress can do this then what would stop them from deciding that that a certain job class or certain workers in other companies made too much money and then pass laws taking as much of that income as they wanted? This is a very important issue and it gets at the heart of just how much power Congress actually has.
If they screw these workers out of their bonuses (sorry folks but no matter how you feel about it, they are entitled to them) then they could be asking for trouble. Congress sunk 170 billion dollars in AIG because if AIG fails then the economy will follow it, at least according to those who pushed the bailout. What would stop AIG from saying screw it and closing its doors. What would stop them from just shutting down and causing turmoil? The government owns about 80% of the company now but the government can’t run it.
Speaking of owning 80% of the company, the entire issue shows just how wrong it was to bail them out in the first place. Government said they were buying up shares in companies in order to help them get back on their feet. We were told they had no interest in nationalizing these companies (at least no more than short term) and that government had no interest in controlling them.
Today Barney Frank said that we [the government] own 80% of the company and that it was time to exercise ownership and stop the bonuses from happening. This is nothing more than a push closer to socialism. Government tells you how much you can make and how much you have to give back. Government takes control of companies and decides what employees can or cannot do regardless of contractual obligations. Government erodes the freedoms that people enjoy and soon instead of building wealth government ensures that all of us are equally poor.
Those who voted for Obama, this is what you voted for. Those who wanted the bailouts, this is what you asked for. You have no right to complain and you have no right to be upset about what is taking place because you wanted this to happen.
As for those of you that are threatening the lives of AIG workers and directing your anger at them; you are wrong. Your anger should be directed at Obama and Dodd and everyone else who voted for the stumulus package. Dodd added the wording and Obama signed it into law. THEY KNEW ALL ABOUT IT FOR QUITE SOME TIME AND THEY ALLOWED IT TO HAPPEN.
Direct your anger at Congress and at Obama. They deserve your wrath.
As an aside, this is the second time not reading a bill has caused embarrassment. Obama issued an EO allowing federal funding of embryonic stem cell research and then signed the omnibus which specifically forbade using federal money to pay for it. He also signed the stimulus allowing the AIG employees to receive their bonuses.
One final point. If there are other companies with employees who had contracts for bonuses then they will be entitled as well. Dodd’s amendment was not specific to any company.
This is what happens when inexperienced, incompetent, self serving people run things. They gave us the financial meltdown and now this.
We need a do over. Let’s get rid of everyone in Congress and the Administration and replace them with competent folks.
**The Obama administration is claiming that it only found out about the bonuses a month ago despite media claims to the contrary. The bonus issue was known for quite some time by members of COngress and probably Geithner. Dodd certainly knew. He would have to know so he could take care of those who have contributed so much money to his campaign.
***Obama received 100 thousand dollars in donations from AIG
Also:
NewsMax
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Tags: aig, bailout, barney frank, contract, dodd, law, Obama, schumer, taxes
Blame Boeing, not McCain for Loss of Contract
Mar 8, 2008 Political
I wrote earlier about the contract for the military’s refueling tanker and how that contract went to a French company. I did not debate the merits of the contract and instead chose to focus on the outrage expressed over the loss of jobs in America because the contract was not awarded to Boeing. The members of Congress who object to the contract are doing so based upon the loss of jobs and they are still at it only this time they are pointing their fingers at John McCain because he was responsible for nixing the tanker contract with Boeing in the past. The politicians are trying to use the actions of McCain against him in the upcoming presidential election and many union members as well as Boeing employees are joining the bandwagon.
I wrote before and I stick to my point that government contracts should not be awarded based upon the number of jobs they provide and to whom those jobs go. The Pentagon is responsible for ensuring our troops get the best possible equipment regardless of who provides it. The idea that the Pentagon and its contracts are some sort of social welfare is ridiculous. As I stated, I do not debate the merits of the contract because I do not know them. My friend Trip at Webloggin wrote an excellent piece indicating why the contract was a bad one and the potential problems that lie ahead. If members of Congress focused on the points Trip made then I would see their point. The prattle dealing with jobs is not an argument I care to hear because it is irrelevant. Certainly Trip has valid points about the economy but they cannot be the sole reason for the contract. If there are problems with the products and the methods, it is one thing but building the economy or providing jobs is quite another.
Of course, our economy is in a slow down so any chance to cry about jobs is one that Congress jumps at. The same people who are crying about lost jobs are the ones who utter nary a word with regard to all the jobs that ILLEGALS are taking from US citizens. If they close the border and get rid of the ILLEGALS there will be plenty of jobs. I realize the jobs involved are skilled and that Mexicans are taking few, if any, of those. However, John McCain is not the reason those jobs are going to France (but he is responsible for the jobs lost to Mexicans). Boeing is solely responsible for the loss of the contract because the company engaged in illegal activity to get the contract and John McCain caught it and ended it. McCain should be praised for halting corruption.
McCain called such criticism off base.
“In all due respect to the Washington delegation, they vigorously defended the process before – which turned out to be corrupt – which would have cost the taxpayers more than $6 billion and ended up with people in federal prison,” he said. “I’m the one that fought against that … for years and brought down a corrupt contract.”
Keith Ashdown, with the watchdog group Taxpayers for Common Sense, said Boeing executives who broke the law were to blame for the demise of the tanker contract – not McCain.
“This was theirs from day one,” he said. “This idea that any lawmaker is to blame is a joke.” My Way News
Boeing executives broke the law and that cost them the contract. That is the bottom line and no amount of finger pointing can change that fact. As McCain points out, many of the people criticizing him are the same ones who went along with the original, illegal, contract. He was the one who stopped it. In other words, the members crying about jobs were more than happy to overlook corruption in order for Boeing to gain the contract and keep jobs here in the US. That is business as usual in Congress and I would bet if we looked at other contracts there is plenty of corruption and these very members were aware and condoned it. I thought that at one time there was talk about denying any company involved in illegal contracting procedures the right to bid on contracts for some period of time. If they had something like that in place perhaps Boeing would not have been able to bid on it at all.
I have problems with John McCain but in this instance I side with him. The money for this contract comes from taxpayers and we deserve to have the money that is extorted from us spent wisely. Corrupt contracts and corrupt politicians cause the need for more money and fuels the Democrat’s desire to raise taxes. People should take a good, hard look at the folks who are upset with McCain and decide if they are the kind of people who are best suited to be good stewards of our money. I think not.
Regardless of how this plays out and regardless of how many fingers get pointed, one thing is for sure, creating jobs is not a valid argument for awarding a contract.
Tags: boeing, contract, corruption, economy, jobs, McCain, tanker
The Pentagon is not the Welfare Department
Mar 2, 2008 Military, Political
The Pentagon recently awarded a contract for air tankers, the huge aircraft that conduct in-flight refuel operations. The award went to a group with French connections and the airframe is the French Airbus. The group, Northrop Grumman/EADS, beat out Boeing for the contract. There are several lawmakers who are upset with the Pentagon’s decision to select the EADS group over Boeing.
I don’t know the particulars of the deal and I am not familiar with the company that makes the Airbus. That seems to be a decent airframe and considering that Boeing was opting to use an airframe that was older and being retired, the EADS groups seems a sensible choice. If Boeing wins the contract and uses an older airframe that no one else uses, then there is a lot of potential for abuse in the supply of parts. There might also be a problem getting parts at a reasonable cost, or at all.
Several Republicans have indicated that they want to be debriefed on the selection and are upset Boeing did not win.
“We should have an American tanker built by an American company with American workers,” said Republican Representative Todd Tiahrt.
“I cannot believe we would create French jobs in place of Kansas jobs.”
Boeing, the second leading US defense contractor after Lockheed Martin, had been considered the heavy favorite for the contract and according to its website is the largest employer in Kansas.
Perhaps Representative Tiahrt (from Kansas) should look at the contract. Part of the aircraft will be assembled in Alabama and will create 300 jobs there and Northrop claims that 25,000 jobs will be created in the US. However, even if the airplane was going to be completely built in France, why should that matter. The goal of the defense department is to procure the best equipment at the best price from all available sources. The Pentagon is not a social welfare program where contracts are awarded on the basis of how many jobs Americans will be provided. My advice to these companies and these politicians who are upset about this is start building good products at a reasonable cost and you will win the contracts. The DOD should not be required to buy from companies that have screwed over the taxpayer before or have built inferior products. In other words, Todd, the DOD is not in the business of “creating” jobs.
Boeing paid a $615 million settlement to the government in 2003 for procurement fraud. Additionally, their choice of airframes means the government would be the sole consumer of parts because the airframe will retire. A system like this is wide open for corruption and price overruns. Even without corruption, if one company is the only one making parts that the government [contractor] needs and the government is the only that needs them, this company can really have an impact on the price which in turn affects maintenance costs.
I know that these members of Congress like to see contract awarded to companies in their districts so that their constituents get jobs and they can crow about creating them. However, when taxpayer money is being used then the contracting office has an obligation to be fiscally responsible and ensure that contracts are awarded to the company that can provide the best service at the best cost. Sometimes it costs more for quality so price should never be the sole factor however, how many jobs it brings to America should not play into the equation unless one of our enemies is the only other entity that can provide what we need.
I will say it once again. If American companies want to win contracts here in America then they need to build quality products at competitive prices. If they have to build in costs to cover union workers, benefits and all kinds of other overhead then they are going to lose. This is particularly true about a company like Boeing that decided to use an airframe that is near the END of its useful life rather than thinking about the future.
Did Boeing think they had this one in the bag because of some shady back room discussions? It does not matter because the Pentagon selected the company they thought best to build the tankers. Once the politicians can figure out that the Department of Defense is not a social welfare program and that it is not designed to give jobs to Americans then perhaps things will start to run more efficiently. One thing is certain, members of Congress should keep their noses out of the procurement process. There are skilled contract people who deal with this so let them do their jobs. They are, after all, more disinterested than a Congressman trying to get reelected.
Besides, if there are people out there who think the DOD is in the business of creating jobs, you are in luck. The DOD has a great job program. All it takes is a visit to your local military recruiter.
Sources:
Breitbart
The Weekly Standard