03.21.09 Do I Really Have to Write About Those AIG Bonuses?
I’m so sickened by and sick of the whole thing that I’m much rather talk about something else. But how could I call myself a political blogger and not deal with this?
My general philosophy about the ultra rich is “off with their heads.” If it were up to me, I would institute confiscatory wealth taxes and marginal rates on income that would make any centrist’s head spin. Morally, I think wealth belongs more to society than to individuals.
So, you can guess my default reaction upon learning of the AIG bonuses: Publish their names and home phone numbers! Force them to hand the money back in public! Tax them, tax them, tax them! Fire them all!
I have also been very angry about Tim Geithner’s role in all this and the general flat-footedness of the Obama administration.
I still feel that way.
Yet, I’m also unsettled by the populist reaction on Capitol Hill. I take my cue from Nobel laureate, liberal economist, and New York Times columnist Paul Krugman, who writes, “It’s not the way you should make policy — it’s clumsy, and it will punish some innocent parties while letting the most guilty off scot-free.”
He and some other thoughtful liberals are right to point out that good policy is not made by a mob. They are also right to point out that, as outrageous as these bonuses are, they are hardly the main issue of the day. The entire world economy is melting down; wealth is far too concentrated than simply $165m going to 73 people; even beyond the economy, there are just a few other urgent issues to tackle (health care or global warming, anyone?)
Another New York Times columnist, David Brooks, shares at least part of this view: “As a tiger sinks its teeth into the world’s neck, we focus on the dust bunnies under the bed.” (Ok, Brooks is no liberal. But he is serious and thoughtful, so I’m allowed to quote him favorably from time to time.)
And about Geithner. Yeah, he should never agreed to let the bonuses through last fall when, as NY Fed chair, he was in the lead putting together the first AIG bailout. But, let’s not forget that an $80-billion package was being crafted in about two days, with a gun to everyone’s heads. No wonder $165 million in horrific bonuses got missed.
Neither should he have gotten the issue totally wrong since he’s been reporting to Obama. But let’s also not forget that he has been working almost by himself (hardly any of Treasury has been staffed yet in this young administration) and the number of we’re-gonna-die-any-moment issues and the magnitude of the dollar amounts involved is growing by the day. Again, it is no surprise that the bonuses weren’t at the top of the man’s radar screen.
(This does not mean I’m happy with Geithner. It is his job to get this stuff right. This is just about adding some perspective.)
On the other hand (there are so many hands in this ugly mess, that the creature cannot be human):
Cries from the right that 95% taxes on ill-deserved bonuses will end the world as we know it are utter bullshit. They are claiming that no rich people will continue working – and contributing their awesome talent to finding solutions to the crises – if they can’t trust the government not to take away their seventh house or first Lear jet. Yeah, right. I certainly don’t see anyone – in the midst of this depression (yes, I used the D-word) – clamoring to hire these folks. They wanna leave AIG for greener pastures? What greener pastures?!
Then there’s the claim (true on its face) that bonus taxes will simply incent companies to shift bonus compensation to regular salaries so that they can continue pouring obscene wealth on folks who don’t need it and don’t deserve it. But this disregards the tax advantages these companies get by doing it the way they have been.
So, where does this leave me? Pretty much where Krugman is:
· Disgusted with the Obama administration for “creat[ing] the impression that it’s owned by the wheeler-dealers” and, thereby, distracting from the real agenda, not to mention giving a platform to pseudo-populists from both parties. (Where I differ from Krugman is that I think it’s more than an impression: the Obama economic team are the wheeler-dealers.)
· In favor of taking away those fucking bonuses from those 73 AIG scoundrels and the other TARP recipients’ executives.
Now, can we move on? Please?
© 2009 Keith Berner