I recently received an e-mail from Sen. Tom Harkin expressing outrage over the AIG bonuses and vowing to ‘pass legislation that completely taxes those bonuses away,’ and ‘send a message to AIG and other companies who received bailout money.’
While I think the anger is well-founded, I fear it misses the point.
Government should never have entered the business of giving our money to failing companies. The line between government and private enterprise is now perverted. Because of the bailouts, politicians are now posturing by interfering in businesses they know little about, and businessmen (bankers in this case) now have more reason than ever to lobby and influence politics.
The whole process is outrageous. Bad companies should simply go bankrupt. There are plenty of banks here in the Midwest that have been responsible. If we lived in a free society, they would find themselves in a position to buy assets from the hugely irresponsible and incompetent New York banks. Instead, money is taken from the competent and given to the incompetent.
At the same time, politicians are pretending to have stuck it to the man. Scolding AIG over several hundred million in bonuses after handing them several hundred billion is ridiculous.
If Congress wants to scrutinize something, they should scrutinize the Federal Reserve. Instead of worrying about AIG’s millions, they should provide transparency to the Fed’s trillions. (from press-citizen.com)