*Much to my chagrin, I provided some inaccurate information. This post originally reported that the AIG bailout was $85 billion. The cost to date is approximately $192 billion. $85 billion was the original bailout last September. I have also been habitually reporting that the stimulus bill was for $787 billion and it was actually $789 billion. I did not mean to charge President Obama with $2 billion less in wastefulness than he really got. I have corrected my errors and apologize for them.
First it was the earmarks in the famed $410 billion omnibus bill and then it was the bonuses the government-owned AIG executives paid to each other. Both are relatively small issues placed under the microscope and both are issues which require little courage to oppose.
Let’s begin with earmarks. Earmarks are simply money that’s provided in the budget, for projects in the home districts of congressmen. Most sound sensible enough: clean up water supplies, revitalizing a public park, or money for foster programs but we usually only hear about the most absurd of them. Money for experiments on the mating patterns of whales, research on pine trees, or the infamous “Bridge to Nowhere.”
It does not take much for a politician to grandstand about the perceived wastefulness of earmarks. Earmarks, which account for less than 1% of the federal budget, are easy for politicians to use to delude the public into believing that it’s all the other politicians who are wasting their money. They can pick out an absurd earmark like the bridge to nowhere and convince enough people that they are fiscally responsible bureaucrats.
Take Missouri Democratic senator Claire McCaskill. Ms. McCaskill, who voted for President Obama’s $789 billion stimulus, railed about the earmarks that showed up in the recent omnibus bill, and carved for herself an image of a fiscal conservative in the Democratic Party. She’s okay with $789 billion that’s either coming from China or being printed out of thin air, but $24,000 for an abstinence program in Pennsylvania is unacceptable? It’s the same reason John McCain can convince people he’s fiscally dependable by opposing earmarks, while being the biggest supporter of the biggest chunk of the federal budget: defense spending.
The president and his cronies lectured to the nation that the $789 billion stimulus had to be rushed through before the earth opened and swallowed us all whole. Then the omnibus comes up and suddenly $20,000 here and $40,000 there are scandals that rival the treason of Benedict Arnold. There is a problem in there somewhere.
How about scrutinizing stimulus and omnibus bills with the fervor the paltry earmarks receive?
Now for the other orchestrated crisis: those damnable AIG bonuses. This is yet another example of the lack of courage required to make a grand political stand.
Last fall, the all-knowing, all-powerful, all-fallible federal government, determining that AIG, the insurance giant, was “too big to fail,” became its 80% owner via a $192 billion bailout. Then, as if out of nowhere, this week it was revealed that AIG was issuing $165 million in bonuses to its executives, an agreement decided upon in 2008, and presumably known by then-New York Federal Reserve president and current Treasury Secretary Tim Geithner.
Like earmarks, anger over executive bonuses is easy to orchestrate. When the American public learns that the executives of a failing company award themselves with $165 million, they’re tempted to grab the nearest pitchfork.
But compared to the government’s purchase of the failing institution, the bonuses are but table scraps. Both the bailout and the bonuses are odious moves, but bonuses stir more rage than the bailout. Nobody can truly comprehend $192 billion or $165 million, but most can comprehend bonuses fairly well and they know that failures don’t deserve them. So, AIG executives become the new object of all ire, earmarks being soooo last week.
Like earmarks, it does not take much courage for politicians to criticize the bonuses (that they implicitly condoned when they bailed them out last year), suggesting odious new legislation that would tax the bonuses at 90%, or propose that the government forcibly take it all away.
When Old Right essayist Frank Chodorov opined that taxation was robbery, he probably did not have insurance execs in mind, but his sentiments are not far off when the government commandeers money they technically okay-ed last year.
As repulsive as these bonuses and earmarks are, what they really amount to is a big plate of nothing.
In a world of billion dollar stimuli and billion dollar wars, earmarks and executive bonuses are nothing more than distractions from the disasters the government is creating by bailing out (socializing, nationalizing) every company or trying to police every corner of the world.
The federal government has taken on far too much for either realistic or constitutional expectations.
Instead of confronting the realities of the bloated government, the solution seems to be to spend more, rather than cutting back, reducing all around, and saving. And instead of doing that, they repeatedly point to others and blame the problems on those who have remarkably little to do with the current situation: earmarks and disastrous executives.
As more money filters in from China, further indebting us to the Orient, and as the Federal Reserve leviathan prints increasingly worthless paper, is the problem really a park in Kansas or an executive getting another $300,000, only to be taxed away?
What, pray tell, will happen if the economy further tanks after the bonuses are taxed away? To adapt from Richard Nixon, you won’t have AIG execs to kick around anymore.
And when the dollar becomes as worthless as a Weimar Mark, shall we hang executives who accepted hand-outs most of us would accept for ourselves, or shall we hang the criminals who gave us the fiat dollar, instigated by egregiously wasteful spending that is giving us the socialistic paradise that is modern America?
There is more at stake than an earmark.