Wednesday, March 18, 2009

Dems Fake Outrage

If you really want to understand the absolute hypocritical nature of the Democratic Congressmen in this afternoon grilling of AIG chief executive, Edward Libby (who btw, came out of retirement to help Congress and AIG out of this mess and takes no salary) then look no further than David Freddoso at NRO. It really is laughable that the Congressmen (especially Barney Frank) express such faux outrage at the $165 million in bonuses paid by AIG to its executives. Why? Because they approved it to begin with :(emphasis mine)

One after another, members of the subcommmittee asked some version of the question: How could the company, in the midst of raking in $173 billion from the government and its Troubled Asset Relief Program (TARP), do something so “unconscionable?”

Rep. Paul Hodes (D., N.H.) declared that the AIG employees’ contracts containing the bonuses “should be held to be invalid or unenforceable on the grounds of public policy.” (No one is sure exactly what that is supposed to mean.) Rep. Barney Frank (D., Mass.), chairman of the Financial Services Committee, suggested that the government use its status as 80-percent owner of AIG to sue and recoup employees’ contractually obligated bonuses. “They gave themselves contracts that insulate them from the losses,” Frank complained. “We’re the effective owners of this company. We ought to exercise our rights as the owners . . . . Let’s bring a lawsuit, as the owners, against people who really did damage to the company.”

But Frank, Hodes, and 244 other congressmen — all Democrats — voted last month for a stimulus package that explicitly allows TARP funds to be used for such bonuses. To be precise, President Obama’s $789 billion stimulus package contained the following provision, which deals specifically with executive compensation at AIG and other companies that receive TARP money:

The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.

Rep. Ed Royce (R., Calif.) read this statutory language to the subcommittee twice during the hearing’s early-afternoon session, just in case anyone was unaware. The executive compensation loophole was not merely a holdover from President Bush’s original bailout plan. It was laid out in clear statutory language that was enacted and signed by Democrats over vigorous Republican opposition. The provision was inserted in conference committee by Senate Banking Committee chairman Christopher Dodd (D., Conn.), one of the biggest beneficiaries of political contributions from AIG employees.

As Royce noted, “Some Democrats were aware of the bonuses, and went out of their way to protect those bonuses.” President Obama was one of them, but you would not know it from his dramatic performance on Monday, when he addressed the issue of AIG bonuses. “I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This is not just a matter of dollars and cents. It’s about our fundamental values . . . excuse me, I’m choked up with anger here.”

Yet it was Obama who signed the very bill that made the rules for bonuses under TARP, and that bill clearly allowed these bonuses.

In Congress, true outrages are not intended to be remedied in realistic ways. Rather, they represent opportunities for politicians — in this case Democrats — to pretend outrage at their own legislation, and then to score points with populist rhetoric.

Update: Here is a bit more interesting tidbits:

Don't look to the Associated Press to hold the relevant actors accountable for the AIG bonus scandal. This piece buries the lede, leaving all mention of the stimulus package for the 14th paragraph, and mentioning the Dodd amendment only in the 26th paragraph:

Sen. Olympia Snowe, R-Maine, and Ron Wyden, D-Ore., won passage of a provision earlier this year that they said would have prevented the type of payments now at the center of a storm.
It was dropped without explanation in the final compromise on the economic stimulus measure, replaced by a less restrictive set of conditions backed by Sen. Christopher Dodd, D-Conn., and accepted by the White House.

"The president goes out and says this is not acceptable and then some backroom deal gets cut to let these things get paid out anyway," said Wyden.

Good grief. The Foxes were watching the hen house and now they are outraged that some hens are gone. It's beyond ridiculous.

I've got two words for you my friends. Tea. Party.