AIG Bonuses: “The Putinization of the American economy”
Today's Financial News - Posted March 19, 2009
What exactly was the point of the well-directed public outrage about AIG bonuses… considering Congress, Treasury and White House were complicit in their approval? We received the answer today as Congress rushed through a punitive taxation bill…
by J. Christoph Amberger
Baltimore—TFN: Democratic leaders rushed a bill to the Congress floor that would retroacively levy a 90% tax on bonuses paid to employees at companies receiving at least $5 billion in government bailout money.
“We figured that the local and state governments would take care of the other 10%.” said Rep. Charles Rangel, D-NY, tax cheat and chairman of the House Ways and Means Committee.
The bonuses, totaling $165 million, were paid to employees of American International Group, including to traders in the unit that nearly brought about the company’s collapse.
The unprecedented speed with which the bill was approved—despite the shaky constiutional grounds it stands on— might provide a clue what the purpose of the Administration’s exercise in public piety and outrage has been all along:
Given the by now established previous knowledge about the bonus payouts on the side of Treasury and White House, as well as the government-appointed top management of AIG….
…and given that Democrat Senator Dodd’s staff was instrumental in injecting the explicit approval amendment for these payments into the respective legislation…
can we still assume that the right hand is truly ignorant of what the left hand is doing in the new Administration?
Or, more plausibly, was the entire sorry affair just a well-rehearsed charade?
Which would open the question as to what it was supposed to achieve or distract from.
Whatever the reason, it set a marker: It was sufficient to set a precedent both in Congress and in the hyperventilating public that deliberately targeted punitive Federal taxation of 90% is not merely acceptable but an expression of moral righteousness.
Establishing a pattern for Congress to stage end-runs around legal obligations.
And by demonstrating that in the United States, government-approved contracts may not be worth the paper they’re printed on. Which injects further distrust and uncertainty into the financial markets… assisting the Administration in implementing Point 1 a), b) & c) of Lenin’s 1917 The April Theses: A Blueprint for Revolution):
“1. The class-conscious proletariat can give its consent to a revolutionary war, which would really justify revolutionary defencism, only on condition: (a) that the power pass to the proletariat and the poorest sections of the peasants aligned with the proletariat;
(b) that all annexations be renounced in deed and not in word;
(c) that a complete break be effected in actual fact with all capitalist interests. (…)
We’ve witnessed similar mechanics at play in the last few years… in Russia’s economic banana republic. Then, it was private oil giant YUKOS, which was dismembered, its assets nationalized with the most threadbare pretense of legality.
Welcome to the Putinization of the American economy.
Neither aspect increases my trust in the United States government and our economic future.
Next Article: Sirius XM: The madness cannot continue
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