A.I.G. Bonuses: Don’t Hate the Player, Hate the Game

I watched this week as the nation’s furor turned towards employees of insurance giant American International Group (A.I.G.) and the $165 million in retention bonus payments recently doled out to executives. Executives, who, as we already know are largely to blame for their role in A.I.G.’s financial crisis that led to the country’s economic meltdown in the first place because of its dealings in bad mortgage-backed securities. This is also the same company that was given a loan in the form of a bailout using taxpayer money to the tune of $122.8 billion. And even though Congressional members can’t seem to pass a universal heathcare bill, raise the Federal Minimum Wage, or adequately fund our public schools, in record time U.S. lawmakers managed to create a piece of legislation that would tax the bonuses for employees at firms receiving federal funds in an attempt to show the public “they care too.” Mind you, these are the same people who never return you, the taxpayer’s and voter’s phone call, but all of a sudden, “they’ve got your back.”  Now whether this bill passes it or not is a whole other story. I’m more concerned with what I like to call “selective outrage” as demonstrated by voters and usually triggered by the media and almost always used as a distraction to keep our focus from the real issues.

Rewarding incompetence with taxpayer money is nothing new for American voters, and I don’t recall there ever being a national outcry of “off with their heads.”

Congress has raised its own pay more than two dozen times, according to the Congressional Research Service before finally just passing a law providing for automatic annual cost-of-living adjustments unless they vote otherwise. Most recently, they voted to forego next year’s pay increase because of the recession but accepted this year’s increase of $4,700 bringing congressional salaries to $174,000. That’s $174,000 in taxpayer money…and that’s just the money we know about. While it may seem like Congressional members are making off like fat rats, let me remind you that we do the same for State and local elected officials across the country.

Corporate executives may have private jets, but our elected officials have Lincoln Town Cars, the choice of many representatives who lease their vehicles at taxpayers’ expense.

According to an article published last year in the Los Angeles Times, twenty-one of California’s 53 House members lease vehicles, among them Reps. Diane Watson (D-Los Angeles) and Laura Richardson (D- Long Beach).
In the article, Watson grew testy when asked recently about her taxpayer-funded vehicle.

“You guys ask me such idiotic questions,” Watson snapped. Her spokeswoman, Dorinda White, explained that Watson chose the Lincoln because she is “over 6 feet tall in shoes” and spends a lot of time driving around her district.

Watson, whose district include numerous schools in the beleaguered Los Angeles Unified School District including Dorsey High School, where a recent district report shows a graduation rate of 36%, an entire student body that is less than 1% proficient in math, and that only 21% students meet the requirement to attend a 2-year or 4-year university.

California Democrat Congresswoman Laura Richardson, who was voted one of the “2008 Most Embarrassing Re-elected Member of Congress” by the Citizens for Responsibility and Ethics in Washington (CREW), choose to allow the taxpayers to foot the bill for her 2007 Lincoln Town Car at $1,300 a month, it was the most expensive car in the House of Representatives.

Richardson’s district includes Compton, where jobless rate is up to 18.4%.

And even though pink slips have been handed out to teachers in California due to the State’s budget crisis in the neighborhood of an $8 billion estimated decline in revenue, the average lawmaker still makes $113,000 a year plus a $173 living expense for each day they have to work in Sacramento, which tends to average out to $30,000 annually. Their living expense allowance alone, which is taxpayer funded, is more than some teachers bring home in a year.

Yes, taxpayers reward incompetence with every paycheck issued to elected officials who continue to represent districts filled with unemployed workers, families living at or below the poverty line, and school districts in crisis. But it’s not breaking news every time our money is automatically deducted from our paycheck and electronically wired into their bank accounts on the 1st of month. It’s only when we show up at our local County, State of Federal building asking for it back in the form of unemployment benefits, welfare, or General Relief that it is.

So why is it that American taxpayer’s are all bent out of shape over the bonuses paid to unknown incompetent executives, who, bonus or no bonus, are wealthier than most of us will ever be? The reality is that the day to day actions of these executives, as wrong as they are for accepting a bonus in any amount, don’t affect the majority of us in comparison to the actions of the people we elected and in most case repeatedly re-elected into public office to represent our best interests. Sign me up for that crusade. Sign me up for that crusade. Sign me up to stand outside of the airport on Thursdays when lawmakers fly back into their districts to meet them with signs of protest for the continued social injustice faced by their constituents. Sign me up to lead the recall of lawmakers who aren’t doing their jobs. That’s how you reward incompetence.

The flap surrounding A.I.G.’s bonuses are just another distraction in a laundry list of distractions designed to keep the taxpayer from focusing on the real issues.

Ask yourself how much taxpayer money went into funding last week’s Capitol Hill A.I.G. hearing that resulted in Congressional members giving “Mad Men,” “30 Rock,” and Alec Baldwin a run for their money for consideration in next year’s Emmy Award nominations for the categories of Outstanding Drama Series, Outstanding Comedy Series, and Outstanding Lead Actor In A Comedy or Drama? After all of the theatrics were over, those same A.I.G. executives climbed back aboard their private jets and Congressional members hopped into their taxpayer funded vehicles headed to their daily evening fundraiser. The media got their sound bytes that they will then dutifully repeat every hour on the hour making you think something really happened in that hearing. And you, the taxpayer, believe it or not, got screwed again.

Don’t hate the player, hate the game.”—rapper Ice T.

The Court of Public Opinion

  • Very well stated.

  • Stanley Bostitch

    Dear Jasmyne: I just listened to your commentary on my local NPR radio station. I think one significant issues you have missed in your outrage of the outrage is this: We’re now nearly 6 months into to the process. Americans are slow to rage, because in large part no one understands what the problem is and how complicated it is. So, after sending billions of tax dollars to the private sector floating falsely in a belligerently arrogant “free enterprise” system over the past several months voters and their representatives have said “enough.” The outrage I think is in large part connected to the arrogance of using tax dollars to pay bonuses when 9million Americans not associated with the malfeasance AIG perpetrated and perpetuated are out of work due in part to AIG’s actions.

    I agree with you that there are elected civil servants that need to be replaced and their constituents get to decide that each election cycle. As far as the non elected civil servants that have no accountability except to the system that both need replacing the problem will continue to remain as long as we insist on tenure and time in service as the benchmark for employment.

    My concern is that the radical right is now parking the entire economic crisis in President Obama’s drive way. The use this AIG bonus scandal as evidence that President Obama is not up to the task of being president. However, I beleive that if we experience a few more 6% increases on the Dow over the next few weeks and months Americans will not remember the story as now being told by the Republicans.

  • LA

    What are you talking about? Clearly, you have ZERO financial/economic background. So please, don’t embarrass yourself.

  • Brett

    Back at you buddy! First of all, the woman has heart. She has soul, and like the rest of us, she’s pissed off. Now as for her economic background – Good, solid authority has it that she happens to be right. Don’t kid yourself. Do a little level-headed research and see what you come up with. Don’t insult me. Mr. LA. don’t embarass yourself.