It’s become very clear that Congressional and Administration ‘outrage’ over the AIG bonuses is Kabuki theatre, meant to impress suckers and divert responsibility. Ed Liddy’s testimony yesterday was very revealing. Congress knew about the bonuses, Chris Dodd wrote exceptions into the bailout legislation and Timothy Giethner himself approved retention bonuses as part of the original AIG funding.
Let me be blunt: the people expressing outrage are either monumentally stupid or brazen liars – or both. There are no other possibilities. Moreover, retention bonuses were paid for very good reasons: to encourage talented people to remain in dead-end jobs to do important wind-up and liquidation work that will save the taxpayers – us, that is – untold billions of dollars. And Ed Liddy brought the numbers with him. Remember, Liddy was Congress’s appointed man, working for a dollar a year to clean up a mess. Now he’s their punching bag for the cameras.
And the best is yet to come: wait until we hear about the retention bonuses paid over at Freddie and Fannie. Remember, the government took over Freddie and Fannie months ago. Whether you approve of retention bonuses or not (I do, within reason), these are government enterprises now under direct federal control.
There are some journalists who see through this bad Congressional theatre. Jake Tapper of ABC has been good and the folks at Fox have been all over this. I leave you with an entertaining Shepard Smith video after the AIG hearings yesterday. Shep is pretty theatrical himself, but his point is well taken: “This is their [Congress's] fault.”
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