As I was watching CBS’ Face The Nation, it was kind of difficult to keep a straight face as the White House’s National Economic Director Lawrence Summers struggled with host Bob Schieffer’s query as to how insurance giant—and the recipient of taxpayer-funded bailout money—American International Group (AIG) could justify its intent to distribute $165 million of the money in bonuses to its employees, both past and present. The individual bonus amounts varied, with payouts ranging from $1,000 to a single $6 million “bonus.” And as if that were not insulting enough to the American taxpayer, 11 of the bonuses recipients are no longer employees of the industry pariah.
The overall bailout of individual financial institutions was part of both former President Bush’s and current President Obama’s plan to deal with the meltdown in the lending and financial industries. But as this latest outrage of financial company excesses came to light, it was obvious that the Obama Administration has been forced to put a spin of justification on AIG’s actions. According to Summers,
"If we simply throw up our hands, refuse to deal with any of this, we'll have the kind of financial catastrophe that we saw after what happened at Lehman Brothers,…[Treasury] Secretary Geithner has negotiated very forcefully with AIG. He has done everything that is legally permissible for the government to do to limit the payment of bonuses. But where there are contracts, binding contracts that were entered into long before the government put any money in to AIG -- we're not a country where contracts just get abrogated willy-nilly."
Predictably, Summers defended the “right” of bailout fund beneficiaries to use the money pay contractual obligations by citing that such a practice was a way for American companies to retain the “best, brightest, and most talented” employees. Yeah…I too thought that was quite the humorous (if not ironic) defense of such an unethical move considering that these “best and brightest” made incompetent decisions which, in addition to driving AIG to near-liquidation, resulted in the company’s recent posting of the largest quarterly loss ever recorded by a company.
What Summers obviously didn’t want to admit is that there were two distinct possibilities underlying the decision were at work here. First, the ball was dropped when it came to crafting regulations regarding the use of the bailout money given to recipients. One has to ask where was the foresight to attach stipulations to the bailout money that would have prohibited any recipient from doing what AIG had decided to do (these bonuses were paid out this past Friday, by the way). Such requirements wouldn’t be all that unusual in the grand scheme; bankruptcy judges modify and even abrogate altogether contracts in the name of repaying creditors. And all of the major automobile makers are currently in negotiations with the United Auto Union, attempting to re-negotiate the terms of their contract in order to save both American jobs and the companies staffed by union members. But in a logical defense—and setting aside the cynical observation that in politics, nothing happens without reason or purpose—it was hard to imagine that any American company would have the brass pair to even considered doing what AIG has done. And this leads to the second possibility that given the signs that AIG and other financial institutions were in trouble due to their greed in trying to capitalize on the open-season atmosphere of the housing bubble, was the possibility that AIG would use taxpayer money to pay out undeserving bonuses known by those who made the decision to prop up the insurance giant? I didn’t envy Summers’ job of administration spin doctor for one second; how could I when I was having so much fun watching him sweat out a defense for the legality of AIG’s actions in front of millions of people?
Going from the ridiculous to the sublime, I decided to flip over to NBC’s Meet The Press, preparing myself this time for some serious political discourse. Imagine my surprise when the theme of trying to make the ridiculous sound sane continued on the network famous for its peacock. In one of those great universal ironies, CBS’ network competitor had a representative of the opposing party on the hot seat. This time, it was Minority Whip and Republican Eric Cantor (R-VA).
Cantor and many Republicans have complained about the cost and the level of spending anticipated by the recently passed and implemented financial stimulus package championed by the Obama Administration. Particularly, they’re concerned with how much such spending will add to the growing federal budget deficit. Many point out the many earmarks stuffed into the stimulus plan inserted by lawmakers from both parties in order to fund pet projects in their local districts as examples of “out of control” deficit spending. Granted that pork spending has always been a concern (and should be outlawed), what I found amusing was the timing of this sudden “concern” about fiscal conservatism.
As host David Gregory rightfully pointed out, Republicans who voted along party lines for former President Bush’s military spending during the early period of the nation’s military action in Afghanistan and later in Iraq had no such qualms about ballooning the deficit then. Consider this exchange between Gregory and Cantor:
MR. GREGORY: Where was all the concern about fiscal conservatism and reining in spending from you and your Republican colleagues during the Bush years?
REP. CANTOR: Well, well, listen, David, if you're asking could we have done better, absolutely. If you're asking us did we blow it in terms of restoring fiscal sanity into this system, absolutely. But that doesn't give now the Democrats in power in this town to go in and repeat the mistakes that perhaps we may have committed in the past. You know, you look at this budget, how can it be that they claim that they're balancing the budget when they are doubling the debt, when they are increasing the deficit to record levels of a trillion, seven hundred billion dollars this year? How is it that, that that is a fiscally sane plan? We've got to remember...
MR. GREGORY: Did you oppose President Bush's budgets that increased the deficit or the debt?
REP. CANTOR: Well, David, we were in a time where I think the priority then was to make sure that we could deliver the money for our troops. And I joined along with Democrats on, on the other side of the aisle as well as my colleagues on mine to say the most important thing we needed to do at the time was to support the efforts of our military to insure our national security.
MR. GREGORY: So it was OK to, to support deficit spending at wartime, but it's not OK now during an economic crisis, when Warren Buffett calls that the equivalent of Pearl Harbor?
Such policy flip-flopping occurs all the time in realm of politics, and such talk shows provide the forums by which astute and politically savvy individuals such as Summers and Cantor attempt to paint themselves and their political persuasion as the guys in the white coats, while maligning their ideological opposites' stances. And sadly, political independents, aligning themselves with neither ideological pole, stand idle and accept such transparent politicking as the way of things. If not for realizing the earnest consequences resulting from this verbal three-card Monte, I would have broken out in full laughter watching.
The problem I have with this weekly airing—nightly if you’re addicted to such shows on CNN or the Fox News Channel—of such ideological smoke and mirrors tends to, without fail, obscure the facts behind the issue(s) at hand. And in a nation of time constraints, where individuals are forced to rely on political bullets and soundbites for their information on important issues, that makes for a dangerous combination. Moreover, the large numbers of politically apathetic and individuals too lazy to research an issue affecting their lives from all angles is what drives these political monsters. Knowing this is how the dynamics of political disinformation works, politicians have a moral responsibility to put aside such politicking and inform the public along the lines of facts, not ideologically-driven rhetoric; if they were true statements rather than opportunistic, power-driven ideologues, they would make the effort.
Citizens too are complicit as cogs in the political bullsh** machine. People must take it upon themselves to both make themselves informed electors, and to insulate themselves from such issue-obfuscation (In fact, a strong argument can be made that part of the reason that so many printed newspapers are folding is because people don't take the time to buy a daily paper and inform themselves of issues which affect their lives).
People love to complain about their government and the officials we elect to represent us. But too often, they wilfully allow the selfish ambitions and ideological agendas of those same representatives to be the sole motivations for the legislation they impliment in our names.
Whether they succeed or not in this endeavor, we cannot continue to complain about self-serving polticians and policies until we start making better choices in who we elect, whether we choose or not to hold these individuals to a standard of accountability, and how much we choose to inform ourselves to the facts of the issues.