AIG BONUSES: THE REAL STORY

Jacquerie of WAMToday discussed the need for us to go beyond rage and replace it with focus; she also talked about the Obama Campaign's ability to deflect us from the real issues and have us chase after bogus matters (Rush Limbaugh, the AIG bonuses, NCAA basketball, the White House dog, the White House bowling alley, and the like).

Finally, she stressed the need for us concentrate on issues where we can win. There are issues where our goals might be noble (e.g., the birth certificate controversy) but which we cannot win -- will not win. Remember, Obama wants us to joust with windmills. He wants us to spend tens of thousands of hours -- and hundreds of thousands of dollars -- on matters that lead nowhere.

Of course, it's not always possible to know in advance precisely what's winnable. For example, for various reasons it has become nearly impossible for Obama and Congress to pass additional "bail out" money for financial institutions, most of them big contributors to Obama, Dodd, and other political sleazebags.

One thing we need to avoid is becoming obsessed with single issues -- any single issues -- when backing candidates. Of course, Obama benefits from such obsessions, because it's part of their tried-and-true "divide and conquer" stategy. We want House and Senate members who believe in the Constitution and in traditional American values. If they disagree with us on one or two issues, that's almost irrelevant.

Yesterday, 87 Republican House members and a handful of Democrats voted against the punitive taxation of AIG bonuses. They did so not because they were pandering to angry constituents or because they favored the bonuses. They did so because they knew "ex post facto" laws are prohibited by the Constitution. In other words, we can't be punished by legislation enacted to make a previous act illegal.

If you read Amity Shlaes wonderful book The Forgotten Man, you'll see that Roosevelt's bad side was to enact ex post facto laws. He then prosecuted men, including Andrew Mellon, for legal tax "loopholes" they have used in prior years. If we don't have equal treatment under the laws, we have nothing.

On AIG, I talked at length yesterday with my friend TC, an AIG employee. She is not involved in any way with the credit default swaps that caused all of the company's problems. She was eligible for a performance bonus in her unit, but because of the company's bottom line financial situation she is not receiving any bonus money. She had planned on getting it, but now she isn't. Her situation is much more the norm at AIG than anyone imagines.

Did she earn her bonus? Yes. Is she getting it? No. And there are many, many people like her at AIG. It's basically a sales business, and bonuses are really a form of commissions. Of course, when the overall company is bleeding red ink, good people suffer because of the actions of a few (perhaps a dozen) bad people.

To reiterate: Almost all of AIG's operations in the more traditional insurance business were profitable in 2008, although one operation was horrendously unprofitable, which of course drove down the entire organization's profit performance.

Gee, why isn't the media explaining this the way I (and TC) have? Because the media, aside from FOX Business News and a few others, is clueless when it come to financial matters. They're much better at demonizing than they are at explaining.

Obama: Forgotten Men, Forgotten Women

Barack Obama shortly after delivering State of the Union Address

If they ever build a monument to political cynicism, the shining face on it should be that of Barack Hussein Obama. In Amity Shlaes brilliant historical study of the Depression era (The Forgotten Man: A New History of the Great Depression), she talks about the people who got left out of FDR's effort to rescue the American economy.

Who were the people who didn't get help? Basically, those in the middle class. The poor got help. The unions got help. Even the lawyers busily helping people sue one another got assistance. The government bureaucrats and political poohbahs made out well. Who got left out? The people who went to work everyday and struggled to feed their families. They didn't demand help. They didn't even ask for it. They were -- and are -- the Forgotten Americans.

[Note: One my other blog, I compare Sarah Palin to Hillary Clinton and Barack Obama. I noted that "Barack Obama being Commander-in-Chief is about the same as Madonna being Mother Superior at a nunnery."]

In the following William Sumner quote (in italics), assume that "A" is the President, "B" is another politically powerful individual (Pelosi?), and X is the person who would benefit from government bailouts.

"As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then proposed to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X . . . What I want to do is to look up C. I want to show what manner of man [or woman in our time] he [or she] is. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who never is thought of . . . . He works, he votes, generally he prays -- but he always pays . . . . (William Graham Sumner, Yale University, 1883)

I have a friend in Illinois who is an emergency room physician. He went to school for many years in order to develop the skills he needs for his important profession. He works many hours of overtime in an area that has more than its share of emergencies. His wife also has a good job.

In the view of Obama and many other left-wing Democrats, my wife and his are Public Enemies Number 1? Why? Because their net income exceeds $250,000 annually. Obama and his allies ("B," which in this case means Pelosi, Reid, and their cohorts) want to increase their taxes sharply.
Oh, and Obama also wants to reduce the deduction for mortgage interest on their home. Since they do own equities, he also wants to increase their tax on capital gains.

My friend and his wife certainly qualify as "C" in Sumner's analysis. Obama has decreed that it is their duty (Joe Biden would call it their "patriotic duty") to bail out X. In their case, "X" would be the hospital employee (unionized, unlike my friend) armed wtih a mop-and-pail. Obama's (and our "B" category, Reid's and Pelosi's) view is that X needs the money more than A (the emergency room physician) and his wife (call her "A1").

Does the fact that there are a lot more Xs than Cs -- that is, a lot more voters -- have anything to do with Obama's policies? Silly question. It has everything to do with it.

My emergency room friend likes his job, but the hours (he mostly works through the night) can be crushing. He calculates that the increased federal tax rates, the increased capital gains tax, the reduced mortgage interest deduction, along with high state income taxes and hefty sales taxes in Illinois would be a problem. For every additional dollar he and wife earn, they'd get to keep perhaps 40 cents (if they're lucky).

Does he really want to spend a lot more time with sick, injured, and dying people for that additional 40 cents? Does he want, as a doctor in a high-risk area, to pay ever-skyroceting premiums for malpractice insurance? Should he ignore the fact that America has five-six times as many trial lawyers grasping for big settlements as any other industrialized nation?

The question is: how much does Barack Obama care about C, my friend? Alas, my friend is the one Sumner talks about as "the man who never is thought of . . ." He is a strong wage-earner and a vital component of civilized society. But he has only limited political power. As the pollsters can tell us, there are a lot more "mop-and-pail" people than there are first-rate emergency physicians.

My friend is the the Forgotten Man. His wife is the Forgotten woman. We generally forget about him also -- that is, until we unexpectedly end up in the emergency room. Then, we hope -- and pray -- he is working those additional hours. And when he saves our life -- or those of a friend or family member -- we don't begrudge him a nickel of his earnings.

Obama's Economics: An American Disaster

Below, one of the growing number of protestors greeting Obama as he flies around the country on Air Force One . . . preaching the gospel of energy conservation.

As the signs in the columns below show, Americans are rising up en masse to tell Obama, "Yes, we're mad at h-ll, and we're not going to take it any more." Put a sign in your front yard, and bring it to protest Obama whenever he's in your neck of the woods. Let him know he can't destroy the American Way of Life.

On Monday a.m., I'll be writing more about why Obama, as President, is an idiot.

In his speech on the housing "crisis" (yes, Barack, we know it's bad), a frightened and flustered Obama used one word 26 times. That word was "crisis." After the first and second use of word, every time someone repeats it in a presentation, it loses its capacity to register in a listener's mind. By the 20th or so usage, a "crisis" had become nothing special. It's the equivalent of the little boy crying "wolf" 20 times. (His speecwriter gets this advice free-of-charge.)

Known (wrongly) as a great speaker, Obama is in fact a terrible one. When he doesn't have a TelePrompter, he's as articulate as a drunk at closing time. Now that he can't sell "hope" and "change" anymore -- and no longer has George Bush to kick around -- he has almost nothing to say.

If the man has ever uttered one memorable line, we must have missed it.

Beyond that, although he's very bad at defining problems, he's even worse at presenting solutions. A hint for Barack: The solution to a problem where the federal government, the states, companies, and individuals have been wildly over-borrowing is not to intensify the borrowing. When the nation and its people are over-spending, the last thing we need is a stimulus (spending) bill.

Here are suggested lines for Obama's future speeches: "Spend your money wisely. Don't borrow money you can't pay back. And don't ever try to borrow and spend your way to prosperity."



Senator Lindsay Graham (R-SC) said the Stimulus Bill means "America's best days are behind it."

Last night (Friday) on "The Lou Dobbs Show" Kitty Pilgrim interviewed a remarkable young woman, Amity Shlaes, who writes for the Wall Street Journal and is the author of a great book (critical of FDR) called "The Forgotten Man." I'm hoping somebody can find the link, because Amity was praising Rick Santelli and calling him (hopefully and prospectively) "(U.S.) Senator Santelli."

Today on FOX, Ben Stein talked about the Stimulus Bill as little more than an effort to pay off Democratic voters -- and to buy the votes of new ones. Failed institutions, like GM and Chrysler, get paid off endlessly because the unions supported Obama. However, the bailouts do great damage to the productive members of society, essentially punishing them for BEING productive. They -- we -- don't get "bailed out."

To our credit, we don't want to be bailed out. We don't want to engage in what McCain called "generational warfare," where our children and grandchildren pay the bill so that we can pretend we're better off than in fact we are.

By all means, let's help people who -- through no fault of their own -- are in trouble. But let's not help those who have no intention of helping themselves. Remember, our country's motto is "In God we trust" -- and not "gimme, gimme, gimme." A society where no one is allowed to fail eventually becomes one where no one is able to succeed.

We sometimes hear how "complicated" the economic situation is, but that is just plain false. As people like Bobby Jindal and Sarah Palin know, life and economics are fairly simple.
For example, you don't buy a house -- or have a lifestyle -- that you can't afford. You make sacrifices. You don't assume that the economy will never take a nosedive. You don't expect that someone else is going to pay your bills. You don't spend every last cent you have coming in. You don't have children and then assume that "society" (i.e., the taxpayers) is going to pay for their upbringing.

Does Obama understand such basic facts of life? Why should he? He's "The Affirmative Action Kid." Yes, he talks about his "student loans," but he went to an expensive prep school in Hawaii and then to three of the costliest schools in America -- Occidental, Columbia, and Harvard.

What percentage of his educational costs did Barack Obama pay? Of course, he hasn't released such facts -- nor will he ever. A good assumption is that he paid a relatively small amount.
From all the evidence, other people financed Barack Obama's education. He got mostly a free ride. It was an early version of his economic policy, where Other People's Money is made available to help out Obama and his chosen few.

It all fits the definition of socialism, which is not so much an economic policy as a vote-buying scheme. What happens when the productive members of society get tired of financing the unproductive? Unfortunately, it looks as if we're all going to find out the answer to that question . . . in the form of diminished economic growth, reduced opportunities, and skyrocketing inflation.