We all remember the TARP bailout of a bunch of Wall Street firms that should have been liquidated and put out of our misery. It finished forever my ability to say anything good about President George W. Bush. The program was robbery of the American people and was implemented in a banana republic manner, forcing people to accept government ownership even when they didn’t want it.
American Insurance Group (AIG) got almost seventy billion dollars. Yet the same people who had made fraudulent insurance promises at AIG, rather than being fired or preferably imprisoned, were given bonuses. Despite the fact that we all now know that AIG is playing Russian roulette with the economy and expecting the US government to ensure that the tax payer is hit with the bullet, the company continued to pay its staff 167-million-dollar bonuses.
AIG CEO Robert Benmosche told the Wall Street Journal what he thought about people who considered this behavior to be outrageous.
“The uproar over bonuses ‘was intended to stir public anger, to get everybody out there with their pitch forks and their hangman nooses, and all that-sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.’”
Criticizing multi-millionaires whose company got billions in corporate welfare and whose staff got 167 million dollars is “just as bad” as Blacks being lynched?
Benmosche got some pushback for making such an insane comparison.
“Ben Lawsky, the superintendent of financial services in New York, Jeff Merkely, a Democratic senator, and Barney Frank, former chairman of the House financial services committee, were among those to criticise Mr Benmosche’s remarks… Mr Frank said: ‘Comparing people who were criticised to people who were killed is bizarre.’ Accusing Mr Benmosche of ‘gross stupidity,’ he added: ‘The fact is AIG was the recipient of extraordinary help from the federal government and I believe the bonuses were not only excessive but hard to explain given the people who got the bonuses were the people who were there when they screwed up so badly.’”
It was the TARP bailouts with those bonuses, I believe, that were significantly responsible for Mitt Romney’s election defeat in 2012. Even though Obama had protected these people, his rhetoric misled the public. He came across as an opponent of Wall Street (a ruse) while Romney seemed like he belonged to them. When people heard of Bain Capital, I suspect it reminded them of the Wall Street financial firms that received billions of dollars at public expense.
For those who want to roll back entitlements and the welfare state, Bush’s TARP treason was a disaster. If multi-millionaires can receive more millions at public expense, how can we tell poor people they need to stop using food stamps and get a job? The rich and powerful in our nation have set a horrible example. I have no idea how we are going to undo this precedent.
But it needs to happen.