That Pound of AIG Executive Flesh Won’t Pay Your Tax Bill

Grab your pitch fork!  Light your torch!  There’s a battle to be waged in the name of egalitarianism.  There are wrongs to be righted on behalf of the aggrieved proletariat.

No weapon is off limits to this populist mob of angry legislators, outraged officials, indignant journalists and seething private citizens. Punitive taxation, public shaming, intimidation, and even threats of physical violence are all fair play if the greedy rich at AIG are to get their just deserts.

Among the recent threats against AIG executives and their families:

“Get the bonus, we will get your children.”

“I would be very careful when I went out side. This is just a warning. If I were ya’ll I would be real afraid.”

“Publish the list of those yankee scumbags so some good old southern boys can take care of them.”

“We will hunt you down. Every last penny. We will hunt your children and we will hunt your conscience. We will do whatever we can to get those people getting the bonuses.  Give back the money or kill yourselves.”

“The Revolution is coming. The family members of your executives are not safe. Your blood will run through the streets in the coming months.”

New York Attorney General Andrew Cuomo attempted to satisfy an increasingly bloodthirsty public by threatening to disclose the names of AIG bonus recipients if they did not return the payments.  And back in Washington, Rep. Barney Frank demanded the names of recipients and refused to keep them confidential in response to safety concerns.

To further address public cries for the heads of AIG executives, the House easily passed a bill to impose a 90 percent tax on executive bonuses at bailed out companies.  The legislation garnered support from most House Democrats and nearly half of Republicans, though it appears to be dead in the Senate.

Even President Obama wondered how AIG executives could “justify this outrage to the taxpayers” and with utter disregard for the sanctity of private contracts, asked Treasury Secretary Timothy Geithner to “pursue every legal avenue to block these bonuses and make the American taxpayers whole.”

One problem: block the bonuses and you lose the talent.

Why should you care if AIG suffers a blow to its executive workforce?

Forget your outrage that taxpayers are underwriting these bonuses and think for a minute.  Panicky legislators tossed barrels of cash at AIG many months ago and our only hope of getting those billions back is to ensure the company is skillfully dismantled by knowledgeable executives. If AIG assets aren’t sold off in an orderly, uninterrupted manner, your government’s investment will become your tax liability.

I know it hurts to say it, but keeping the remaining AIG executives at the company is in your best interest.

Many AIG executives worked for $1 salaries last year with the expectation that they would be compensated with bonuses if they remained at the beleaguered company.  This manner of structuring compensation helped AIG retain qualified employees to dismantle the company.  What we’re calling retention bonuses are essentially deferred salary payments postponed to ensure talent sticks around.

Even if you had the specialized knowledge, would you work for just a dollar a year?  Would you pass up a stable, high paying job at a solvent company out of sheer loyalty to AIG?  And where else should AIG management have looked to find expertise on dissolving these complex financial instruments and assets?  Could we spare the time for training and learning curves?

Unfortunately, the threats have worked and the strong-arming has paid off.   Jake DeSantis, an executive Vice President at AIG Financial Products, published his letter of resignation in the New York Times this week:

After 12 months of hard work dismantling the company — during which A.I.G. reassured us many times we would be rewarded in March 2009 — we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.

I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.

Like most current AIG executives, DeSantis was not responsible for the company’s massive credit default swap losses, but that hasn’t insulated him from the witch hunt conducted by Barney Frank, Andrew Cuomo, and others.  Rather than remain at AIG out of fear, he has elected to leave on his own terms.

News of two more AIG resignations was announced Thursday.   Mauro Gabriel, president and CEO of Banque AIG, and Jim Shephard, deputy CEO are leaving due to the hostile business environment at AIG.  There is some concern that a failure to find replacements could result in hundreds of billions of dollars in derivative contract defaults.

If that happens, good luck attracting qualified talent to help wrap up this AIG mess.

Will the rabble-rousing have been worth it then?  Will that pound of executive flesh fill the coffers at Treasury?  No, but that won’t stop the public hunger for class warfare from continuing to eclipse law, ethics, and even self-interest.

March 27, 2009 · Filed Under Barack Obama, Economy

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Breaking News: The Pope Thinks Catholicism is Swell

En route to the capital of Cameroon on Tuesday, Pope Benedict XVI addressed the spread of HIV in Africa:

“You can’t resolve it with the distribution of condoms,” the pope told reporters aboard the Alitalia plane headed to Yaounde. “On the contrary, it increases the problem.”

The pope said that a responsible and moral attitude toward sex would help fight the disease.

This is where I’m supposed to insert my outrage and indignation at the Pope’s criminally negligent condemnation of artificial contraceptives.  Something about how he has the blood of thousands of Africans on his hands, perhaps?

But is that what the Pope really said?

Context is everything, and it seems that most media reports of the Pope’s words were decidedly out of context. Consider this more complete transcript from the Catholic News Service:

I would say that this problem of AIDS cannot be overcome with advertising slogans. If the soul is lacking, if Africans do not help one another, the scourge cannot be resolved by distributing condoms; quite the contrary, we risk worsening the problem. The solution can only come through a twofold commitment: firstly, the humanization of sexuality, in other words a spiritual and human renewal bringing a new way of behaving towards one another; and secondly, true friendship, above all with those who are suffering, a readiness – even through personal sacrifice – to be present with those who suffer. And these are the factors that help and bring visible progress.

Hey, wait a minute … the Pope thinks condoms won’t address the AIDS epidemic in sub-Saharan Africa if people aren’t tending to their spiritual needs and being kind to one another? How dare he deliver this shocking defense of Catholic doctrine?

The Pope is no dummy.  He knows that AIDS has ravaged Africa and that in seven southern African countries, more than 15 percent of adults have HIV.  But will 15 percent of adults give up the right to have children if the Pope himself hands them a pack of Trojans?  Will a condom on every bedside table prevent the violent transmission of HIV through rape (another epidemic in the region)?  Of course not.

The Catholic Church does incredible work in Africa providing medical care to HIV patients and distributing anti-retroviral drugs.  Resolving the AIDS crisis will require a combination of money, research, education, medical care, counseling, social reform, and prophylactics. If the Roman Catholic Church provides most of those in abundance, does its leader really deserve our ire?

March 20, 2009 · Filed Under Religion

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ObamaCare: More of the Same Sicko Ideas

When Barack Obama convened a White House forum on health care reform last week, there was one ground rule: check fresh ideas at the door. Of course, you’d never know that from Obama’s opening remarks rife with the usual bipartisan Mad Libbery:

In this effort, every voice has to be heard. Every idea must be considered. Every option must be on the table. There should be no sacred cows. Each of us must accept that none of us will get everything that we want, and that no proposal for reform will be perfect. If that’s the measure, we will never get anything done. But when it comes to addressing our health care challenge, we can no longer let the perfect be the enemy of the essential. And I don’t think anybody would argue that we are on a sustainable path when it comes to health care.

Despite the inclusive rhetoric, invitees were carefully selected to ensure no contraband proposals made it past security checkpoints.  Among the attendees were the usual suspects:

The vast majority of the groups represented at the summit strongly support a federal health insurance plan, and some are even advocates of a single-payer system. The list of summit participants included no fewer than nine unions: SEIU, UFCW, USW, Teamsters, UAW, CWA, Change to Win, AFSCME, and AFL-CIO.

The attendance list also included Physicians for a National Health Program (“Our Mission: Single-Payer National Health Insurance“) and other liberal advocacy groups such as the Center for American Progress, Campaign for America’s Future, AARP, Planned Parenthood, Families USA, and Health Care for America Now.

Advocates of free market health care models were conspicuously absent.  Michael Cannon notes that the guest list excluded representatives from some of the top health policy think tanks in the world, including:

  • American Enterprise Institute (the #5 think tank in the world for health policy)
  • Cato Institute (ranked #7)
  • National Center for Policy Analysis (ranked #10)
  • Manhattan Institute
  • Pacific Research Institute
  • Galen Institute
  • The Heritage Foundation

What could analysts from these policy centers bring to the table?  Here’s just one example of an innovative approach to health care outlined by John Cochrane in a paper published by the Cato Institute.  He proposes a systemic reform that would separate health coverage into two products: medical insurance and what he calls health-status insurance.  “Medical insurance covers your medical expenses in the current year, minus deductibles and copayments. Health-status insurance covers the risk that your medical premiums will rise,” he explains.

John Cochrane’s free market solution would provide portability, preserve choice, and increase affordability. But as Reason Magazine’s Ronald Bailey points out in his excellent summary of the plan, Dr. Cochrane did not receive an invitation to the White House summit.

John Cochrane and other creative thinkers have been locked out of the debate, but the Teamsters and UAW have the president’s ear as he prepares to make a $634 billion down payment on health care reform. What happened to “every voice has to be heard”?

March 13, 2009 · Filed Under Barack Obama, Health care

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Meghan McCain: She’s What’s For Dinner

Meghan McCain has a lot of conservative panties thoroughly bunched.  It’s not just that she’s the spawn of failed presidential candidate John McCain, or that she’s only been a Republican for a year.  It isn’t even her fairly mild attack on Ann Coulter.

The real reason conservatives have declared Meghan McCain public enemy du jour is that she’s a Republican with media visibility who dares to challenge conservative orthodoxy.  Her columns don’t rail against the “drive-by media” and she doesn’t pepper her appearances with accusations of RINOism and odes to Rush Limbaugh.  She embraces Republican principles, and rejects conservative demagoguery.  But perhaps her greatest affront is in having the gall to stray from lockstep adherence to partisan dogma on the issue of gay marriage.

Here’s an excerpt of Meghan’s current column, My Beef With Ann Coulter:

I am not suggesting that extreme conservatism wasn’t once popular, nor am I suggesting I should in any way be any kind of voice for the party. I have been a Republican for less than a year. Still, even after losing the election, I find myself more drawn to GOP ideals and wanting to fight for the party’s resurgence. And if figureheads like Ann Coulter are turning me off, then they are definitely turning off other members of my generation as well. She does appeal to the most extreme members of the Republican Party—but they are dying off, becoming less and less relevant to the party structure as a whole. I think most people my age are like me in that we all don’t believe in every single ideal of each party specifically. The GOP should be happy to have any young supporters whatsoever, even if they do digress some from traditional Republican thinking.

I’m often criticized for not being a “real” Republican, and I have been called a RINO—Republican In Name Only—in the past. Many say I am not “conservative enough,” which is something that I am proud of. It is no secret that I disagree with many of the old-school Republican ways of thinking. One of the biggest issues from which I seem to drift from the party base is in my support of gay marriage. I am often criticized for previously voting for John Kerry and my support of stem-cell research. For the record, I am also extremely pro-military and a big supporter of the surge and the Iraq war.

Peg Kaplan is the only blogger I follow who wrote something positive about Meghan’s column.  The rest of the blogospheric criticism is what you’d expect: Meghan is a tool with no credibility who should shut her trap because Conservatives don’t care what she thinks. There’s also the ever popular insult levied at right-leaning women that all she has going for her is her shapely backside.

Hey, come to think of it, this story sounds all too familiar: a bright, attractive Republican woman opens her mouth, only to have factions in her own Party clamoring for a chance to shut her up with as much snark and venom as they can muster.  Sarah Palin endured this treatment from the self-anointed conservative intellectual elite during campaign season, and Meghan McCain is getting it from conservative ideologues who didn’t bother to show up at the polls and then bitched when her dad lost the 2008 presidential election.

And really, what better way to bolster their conservative bona fides than by purging Meghan from the Republican Party.  Just imagine all the contented purrs and affectionate tongue baths they’ll get from their ideological bretheren when Meghan McCain’s RINO head is mounted right above the fireplace.

Of course, that will do nothing to undermine the chances of a permanent Democratic majority, but who cares about winning elections when you can win the conservative pissing contest?  Members of the Republican Party really can’t seem to help eating their own.

Meghan isn’t trying to offer sophisticated political analysis.  She’s a politician’s kid with a unique perspective on Republican politics and a bigger than average soapbox thanks to her father’s recent candidacy.  But that doesn’t make her views on the Republican Party any less instructive.

Michael Steele should be taking notes here: there are tons of liberty loving, fiscally conservative Meghan McCains out there, and most of them are registered Democrats because of what they’ve heard about the angry, hateful bigots in the GOP. It’s self-defeating for Republicans to ignore Meghan when her wing of the Party could be just as reliable at the polls as this nebulous “Republican base” we hear so much about.

The base can do their damnedest to oust Meghan from the Party, but she seems to have intuited what many GOP leaders refuse to acknowledge: undying fealty to conservatism is not a criterion for membership in the Republican Party.  Like many conservatives, Meghan believes in a strong military and thinks Bobby Jindal is a brilliant rising star in the GOP.  Why should anyone care if she feels the label “progressive Republican” gives her a little bit of hipster street cred or gasp, best describes her positions?

As for Meghan’s beef with Ann Coulter, she’s hardly the first faithful Republican to find Ann’s style too abrasive.  I never had much interest in Ann until I saw her on Red Eye. In a more relaxed setting, she has a good sense of humor and comes across as far more thoughtful and much less combative than I expected.

I respect Ann Coulter’s amazing talent for manipulating the media into airing just the right sound bytes to rile up her faithful fans and enrage her detractors.  She’s like Rush Limbaugh with an education.

But Meghan McCain doesn’t need to like or even respect Ann Coulter and Rush Limbaugh to be worthy of membership in the Republican Party.  Simply believing in Republican ideals is just fine.  And despite threats to the contrary, the chattering classes can’t actually lock her out of the Republican clubhouse or revoke her GOP decoder ring.

Meghan McCain and Ann Coulter are both welcome in my tent.  I probably wouldn’t seat them next to each other, but they’re both welcome.

March 11, 2009 · Filed Under Big Tent, Republican Strategy

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Seeking Clarity in the Abortion Debate

This weekend on Secular Right, John Derbyshire proposed pruning some of the language we use to frame the abortion debate:

Isn’t there any way to wean people off the silly, prissy, dishonest terminology of “pro-life” and “pro-choice”?  What’s wrong with “anti-abortion” and “pro-abortion”?  That’s what we’re talking about, isn’t it?

I sympathize with his frustrations about intellectual dishonesty in the abortion debate, and agree that semantic chicanery is rampant on both sides of the issue.  However, the four terms in question – pro-life, pro-choice, pro-abortion, and anti-abortion – constitute a set of distinctly meaningful positions that are not necessarily mutually exclusive.

For example, in the absence of a belief in automatic ensoulment, can’t one be anti-abortion because the idea of snuffing out a potential life is offensive, but pro-choice in the recognition that medical professionals and clergy are better qualified than the government to help women and couples make family planning decisions?

I realize “pro-choice” and “pro-life” entered common parlance thanks to savvy pollsters engaged in propagandist wordplay, but they now serve a purpose in helping people define their viewpoints.   Positions on abortion are not binary and the language we have reflects that, so devising a simplified linguistic framework would actually impede clarity in the debate.

Finally, while I understand where John is coming from, trimming the language is a little Newspeakish for my taste, even if suppression of free discourse isn’t the intention.  I think I like the Oldspeak just fine, warts and all.

March 8, 2009 · Filed Under Abortion

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Please Pass the Anti-Semitic Salt

You know you’re an anti-Semite when you can’t stomach the thought of seasoning your food with kosher salt.

But fear not, Maryland businessman Joe Godlewski has launched a new venture to bring a more palatable Christian alternative to a store near you:

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Retired barber Joe Godlewski says he was inspired by television chefs who repeatedly recommended kosher salt in recipes.

“I said, ‘What the heck’s the matter with Christian salt?'” Godlewski said, sipping a beer in the living room of his home in unincorporated Cresaptown, a western Maryland mountain community.

By next week, his trademarked Blessed Christians Salt will be available at http://www.memphi.net, the Web site of Memphis, Tenn.-based seasonings manufacturer Ingredients Corporation of America.

It’s sea salt that’s been blessed by an Episcopal priest, ICA President Damon S. Arney said Wednesday. He said the company also hopes to market the salt through Christian bookstores and as a fundraising tool for religious groups.

Lest you think this is simply clever Christian re-branding of a familiar household staple, Godlewski doesn’t plan to stop at kosher salt.  Next up, I kid you not, Christian branded rye bread, bagels and pickles.

Godlewski also told reporters,”There’s no anti-Semitism. I love Jesus Christ and he was a Jew.”

I’m not sure if that’s better or worse than attempting the “I have a Jewish friend” defense.

March 5, 2009 · Filed Under Anti-Semitism

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