Are We Taxpayers – Or Suckers?
"I mean how do they justify this outrage to the taxpayers who are keeping the company afloat?" he asked today, joining a chorus of U.S. officials stunned by the weekend news that AIG was paying $165 million in bonuses by yesterday.
The dictionary defines sucker as a person easily cheated, deceived or imposed upon. At the very least, the American International Group has delivered taxpayers a sucker punch.
Mr. Obama calls it "a corporation that finds itself in financial distress due to recklessness and greed.
"Under these circumstances," he said, "it's hard to understand how derivative traders at A.I.G warranted any bonuses, much less $165 million in extra pay."
He says he's directed Treasury Secretary Tim Geithner to "pursue every single legal avenue to block these bonuses and make the American taxpayers whole." (Read more of Mr. Obama's remarks>)
It was six months ago tonight, that the Federal Reserve Board offered AIG the first of four installments of bailout funds that now total over $170 billion. The funds were intended to keep the insurance giant from collapsing and triggering a global economic meltdown. No one meant to reward the already well-paid executives of a company whose policies ran it into the ground.
If the government were not intervening, AIG would have imploded and the jobs of those receiving the bonuses would likely have evaporated.
The cries of outrage were deafening yesterday. On yesterday, White House Economic Advisor and former Treasury Secretary Lawrence Summers used a form of the word three times in nine seconds.
"It is outrageous. The whole situation at A.I.G. is outrageous. What taxpayers are being forced to do is outrageous."
But he said there's not much the government can do about it. The company claims to be contractually obligated to pay the bonuses so long as its up and operating.
Rep. Elijah Cummings, D-Md., said the bonuses were like giving money to someone in need and than being slapped in the face with it.
But Federal Reserve Board Chairman Ben Bernanke defends the rationale behind the bailouts of AIG and others.
On last evening, he again raised the familiar house-on-fire metaphor.
"If you have a neighbor, who smokes in bed and he's a risk to everybody. If suppose he sets fire to his house, and you might say to yourself, you know, 'I'm not going to call the fire department. Let his house burn down. It's fine with me.' But then, of course, but what if your house is made of wood? And it's right next door to his house? What if the whole town is made of wood? Well, I think we'd all agree that the right thing to do is put out that fire first, and then say, "What punishment is appropriate? How should we change the fire code? What needs to be done to make sure this doesn't happen in the future? How can we fire proof our houses?" That's where we are now. We're having-- we have a fire going on."
But to many it looks like we not only put out the neighbor's fire, but rewarded him with money for a new house and a BMW for the garage. That's a new spin on neighborliness.
"There's a sucker born every minute," American huckster and showman P.T. Barnum is credited with saying. Taxpayers are born even more frequently.
In light of the bonus payments with taxpayer money, maybe we need to change the name of the IRS to Ignorant Roster of Suckers.
Below you can watch Mr. Obama's remarks today:
More AIG Related Coverage:
Poll: Frustration Growing Over Bailouts
Can AIG Get The Bonus Money Back?
Will AIG Flap Lead To Obama Backlash?
N.Y. AG Wants Answers On AIG Bonuses
White House Seeks "Mechanisms" To Recoup AIG Bonuses
