Monday, March 23, 2009

If we're taking bonuses away, perhaps we shouldn't stop at AIG

As I write this, it appears that a majority of the public is still outraged over the "bonuses" that "executives" at AIG have been receiving, and Congress has been pandering to the public's outrage by crafting legislation that specifically targets the AIG "executives" who have received the "bonuses."

However, Outside the Beltway links to a Scrappleface post that raises the possibility of this outrage expanding.

the Obama administration today expanded its plan to control Wall Street executive pay, adding provisions to limit compensation for star performers in the National Football League (NFL), National Basketball Association (NBA) and Major League Baseball (MLB).

“Some of these sports stars, like AIG execs, have negotiated sweetheart deals paying them millions of dollars, and yet they lose games,” said White House spokesman Robert Gibbs. “The president shares the outrage of the American people at these obscene salaries and bonuses. There’s nothing that makes the little people feel littler than the thought of these fat cats getting fatter just because that have specialized skills that are in high demand in a free-market economy.”

Indeed, the White House released a recent poll showing that 75 percent of Americans answered ‘Yes’ to the following question: “Do you believe President Obama should personally limit the compensation of anyone who earns a lot more than you do?”

More here.

Now, I personally don't consider this a Democratic commie move - this move against AIG is clearly a bipartisan effort, as Senator Grassley's unfortunate remarks demonstrated. And, even if it was candidate Obama who identified $250,000/year as the dividing line between working people and non-working people, I didn't see a lot of Republicans arguing against the "recoup AIG money" bill.

But you do have to wonder why the dividing line was set at $250,000 a year...rather than, say, $178,000 a year.

You see, members of the House and Senate currently make $179,000 per year. And while I personally believe that $179,000 is not an exorbitant salary for the work they do - in fact, it's probably well below what they should be making - you have to figure that if investment professionals and professional sports stars "make too much money," somebody's going to look at some other people.

Think about it - since AIG is now primarily owned by the Federal government, who is the true board of directors of AIG? That's right, the U.S. Congress.

And since major league baseball has enjoyed a special antitrust exemption for nearly a century, who is ultimately responsible for the economic well being of this monopoly? That's right, the U.S. Congress.

And what about all of the other problems that we're facing, including general economic hard times, warfare, and so forth? While the executive branch certainly shares partial blame, Congress also shares partial blame.

So if AIG makes big "bonus" payments to "executives," and baseball players ingest illegal substances, and if the economy is going to hell, and if our people are getting killed all over the world, shouldn't those at the top be punished?

Yet Congress has not gone through furloughs or pay cuts. Quite the opposite, as this January 2009 story notes:

Despite the lousy economy, high unemployment and plummeting housing prices, U.S. congressional members get a $4,700 pay raise....

So if it's perfectly OK to take money from AIG "executives," why isn't it OK to take money from the members of Congress?

I guess that would be too irresponsible.
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