Once Again, Democrats are Failing as Regulators

So they go out and stir up a frenzy about AIG, which I am sure every American and Non-American alike has now heard.  But the dirty secret always follows, and unfortunately never gets heard by the general public who continue to vote in these people who are asleep at the switch or so happy-go-liberal they just can't help themselves to the spending banquet table enough to realize they continue to sign away everything - or they just don't care.

The dirty secret: The 'Spendulus Bill' was signed after being written behind closed doors with no opposition input.  A clause was inserted that protected businesses recieving government TARP funds from being held liable for paying bonuses to executives and employees that had already been contracted.  And yet now all these Dems come out, including Obama - who was so gung-ho happy to sign the bill he must have forgotten to read it, and villanize the replacement CEO for AIG for paying the bonuses (guaranteed there would have been lawsuits if they didn't pay them, they were contracted).  All while putting a cover of 'rage' and other rhetoric over the fact that they - the Dems - allowed it!  If AIG had more say - which they don't because they now have a major position owned by the government - they should sue the government and keep those bonuses in the pockets of those who recieved them.  I for one would much rather have that $150 million dollars spent by even the most pompous of executives before allowing it to be spent by Frank & Co. 

And the really bad part of it for AIG stems from this statement by  Barney "the-man-who-always-has-something-to-say" Frank: "I think the time has come to exercise our ownership rights."

May the Capitalism we knew and enjoyed Rest In Peace.  All I can hope for is an advancement to Pure Capitalism.  Come on Ben Bernanke, you're our only hope.

See the article for more details:

Democrats' Tacit Bonuses Approval May Undercut Rage (Update1)

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By Ryan J. Donmoyer

March 18 (Bloomberg) -- The outrage expressed by President Barack Obama and Democrats in Congress over $165 million in bonuses paid to American International Group Inc. may be undercut by their tacit approval of the payouts only a month ago.

The $787 billion economic stimulus bill approved by Congress Feb. 13 and signed into law by Obama three days later contains language that effectively authorizes bonus arrangements at companies receiving taxpayer bailouts as long as they were in place before Feb. 11.

The provision, on page 404 of the 407-page law, carves out those arrangements from new restrictions on pay at bailed-out companies that took effect with Obama's signature. Now Obama and many of the same lawmakers who voted for the law, such as New York Senator Charles Schumer and Banking Committee Chairman Chris Dodd, are demanding AIG employees surrender their bonuses.

Dodd told CNN today he put the provision in the final version of the stimulus measure at the insistence of the administration, which was worried about lawsuits if existing compensation contracts were revoked.

"The administration had expressed reservations," Dodd told CNN. "They asked for modifications. The alternative was losing the amendment entirely."

The provision has proven awkward for Democrats who have led expressions of outrage in Congress this week, because most of them voted for the stimulus last month. No House Republicans and only three Senate Republicans voted for the stimulus measure.

Closed Doors

"The fact is that the bill the president signed, which protected the AIG bonuses and others, was written behind closed doors by Democratic leaders of the House and Senate," Iowa Republican Senator Charles Grassley said in a statement today.

"There was no transparency, so the only way the public will ever know who added the language to protect bailout company bonuses is if someone from the small group of Democrats in the room says so," Grassley said.

Schumer yesterday sent a letter to AIG Chief Executive Edward Liddy warning him to return bonuses or face confiscatory taxes on them. The letter was signed by Senate Majority leader Harry Reid and seven other senators.

Brian Fallon, a spokesman for Schumer, said the senator "supported a provision on the Senate floor that would have prevented these types of bonuses, but he was not on the conference committee that negotiated the final language."

Final Negotiations

Dodd spokeswoman Kate Szostak said yesterday the exception to Dodd's executive-compensation restrictions was added during lawmakers' final negotiations with the Treasury Department over the stimulus.

She rejected Republicans' suggestions the date was included to exempt the AIG bonuses. "Senator Dodd was completely unaware of these AIG bonuses until he learned of them in the past few days," said Szostak. "To suggest that the bonuses affecting AIG had any effect on Senator Dodd's action is categorically false."

Other Democrats who voted for the stimulus bill have ramped up criticism this week of AIG's bonuses, including Massachusetts Representative Barney Frank, the chairman of the House Financial Services Committee, who told reporters, "I think the time has come to exercise our ownership rights."

House leaders including Speaker Nancy Pelosi and Majority Leader also criticized AIG.

To contact the reporter on this story: Ryan J. Donmoyer in Washington at rdonmoyer@bloomberg.net

Last Updated: March 18, 2009 19:25 EDT

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