The AIG Smokescreen

It’s not that I think the folks at AIG deserve bonuses. It’s not that I think they should be rewarded for playing a pivotal role in driving the national economy into the sewer.

I won’t point out that taxing one particular subset of Americans who are deeply unpopular is politically soothing but Constitutionally bunk.

I won’t even point out that the TARP program specifically allowed for executive compensation just like what we’re seeing now.

What I’d like to point out is that what the bailout, the stimulus package, and all of the other actions the government is taking to try and save the economy isn’t going to fix the core issue facing the US. The idea that any given company is too big to fail. We’ve allowed our corporations in America to become so large that they dictate fiscal policy.

The very idea that we’re going to some how “take back” the AIG bonus money is laughable, next quarter we’re likely to give AIG more TARP funds. Taking back our own money to give it back to the same company points out how twisted things become when government and private industry intertwine.

The rage we are feeling about AIG bonuses paid with our Tax dollars is justified. But it’s misplaced. We ought to have some rage at the fact that our government had no choice but to bail out these huge corporations because for too long we’ve sat by and let them become so integral to each other and to the global economy that they cannot fail, cannot be accountable for their errors, and are considered above the rules that govern the rest of modern capitalism.

When the dust settles and smoke clears from this debacle. I hope we see some real reform in the form of trust busting and robust regulation that brings these banks back into line with sanity. All the bonus taxes in the world won’t do a thing, until we institute real, politically difficult reform.


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