March 19, 2009
It was reported endlessly yesterday that Americans are suffering from bailout fatigue as AIG chief executive, Edward M. Liddy was peppered by questions coming from our congress. It was also reported yesterday that more bailout funds will be asked for to shore up this economy. When that occurs, I just do not know how Americans will react seeing the mismanagement of our tax dollars by AIG, Bank of America as well as other financial institutions. Are we caught between a rock and a hard place where the sentiment will be, damned if you do and damned if you don’t?
All the American people know as they brandish their pitchforks is that we are hopping mad; yet we do not have any real place to express such anger. Sure we can call up our elected officials, but they are already up to their eyeballs and more hearing the same complaints come in day-after-day. When issues such as the economy or immigration reform are in the spotlight, what transpires during these events is that we the American people call our elected officials. Often we get a comments line to leave our message. It just makes one want to tear their hair out when we who put these officials in office get an answering machine. During the immigration reform bill, so many calls were made to congress that it shut the phone system down. So, we sit and stew. All of which has us losing faith in a government that is supposed to be for, of and by the people.
While the bonus compensation was the issue which most focused on yesterday another part of this heinous story hardly anyone focused on. These bonuses were worth millions yet AIG gave portions of the bailout funds to foreign entities. This should have all Americans seeing red as we raise our collective fists in great umbrage.
ABC News picked up on a story written by USA Today concerning this very matter. According to ABC and USA Today, “Some of the leading recipients of American taxpayer money are France's Societe Generale, $11.9 billion; Deutsche Bank of Germany, $11.8 billion; and Barclays of Britain, $8.5 billion.” As you will see it makes any compensation or bonus package received by AIG employees appear to be small in comparison.
Before I mentioned being between a rock and a hard place when it comes to infusing our money into companies such as AIG: So I paid close attention to what Raymond Hill, who teaches finance at the Goizueta Business School had to say within this one piece, "without government intervention, that web would have collapsed, creating havoc in the global financial system."
Is this truly a scandal of biblical proportions or just the way business operates? I for one would love it if all of our elected leaders in Washington would come together to answer the people’s questions as to why our money is then sent overseas to these foreign entities. I would love for our news media to act on the people’s behalf and ask our elected officials the tough questions and more importantly get the correct answers. There are some who do, but we need all getting to the bottom of this fine mess we all now find ourselves in. To those within the media who refuse or ask soft-ball questions, it is your financial derrieres on the line as well.
One question, I would love for them to ask: Are you, (name of elected official) and this financial institutions trying to pull the wool over our eyes and cry the sky is falling so we are suckered into paying for their shortcomings and yours?
Speaking of any elected officials’ shortcomings, those who have accepted PAC money by AIG and other financial institutions: Are they truly acting in the people’s best interest or more importantly this financial institution and others? How can they be agents of change when they have received these moneys?
If congress is asking for the return of these bonuses to our coffers, I do suggest that any elected official who has received moneys from any financial institution do the same. Return that money to said companies, so they are not tainted by these miscreants on Wall Street. Or better yet, hand over those moneys to the U.S. Treasury. While a measly amount compared to the millions in bonuses and the billions paid out for bailouts, it would be seen by the American people meritoriously. They may have to go into debt, but I would invite them all to look around to see that the American people are already facing a debt as high as the Himalayas. If we are all going to share in the pain, then that means everyone. No one should be spared and the first who should feel this pain are these CEOs, CFOs of these financial institutions as well as our elected officials.
The item that again, no one is speaking of as we borrow these funds to shove down the throats of these institutions to keep them afloat is an article I read in the NY Times. It was this passage which screamed out at me, "Last week, China’s prime minister, Wen Jiabao, even reminded Washington that as one of the United States’ biggest creditors, China expects Washington to safeguard its investment." I just wonder what the Chinese government is thinking as they watched the proceedings take place between AIG and our congress yesterday. In fact, it scares me.
They are literally turning our financial disaster into their economic boom as “Construction has already begun on new highways and rail lines that are likely to permanently reduce transportation costs.”
When it comes to small business lending here in the United States by our own federal government, this one screamed out at me at the incompetency of our government, "And while American leaders struggle to revive lending — in the latest effort with a $15 billion program to help small businesses — Chinese banks lent more in the last three months than in the preceding 12 months." As you look at that figure of $15 billion, revert back to how much AIG lent to foreign entities and tell me that our priorities are not screwed up.
As the Obama administration and congress scramble to help American businesses stay afloat, China is seizing on our frailty as one reads, "The ministry is now leading its first mergers and acquisitions delegation of corporate executives to Europe; the executives are looking at companies in the automotive, textiles, food, energy, machinery, electronics and environmental protection sectors."
Some in our government may rail against terms such as socialism, communism and other derogatory terms, but what they are failing to see as we are held back is that through this endless borrowing over the years, China is now succeeding. That borrowing also extends to paying for the wars in Iraq and Afghanistan. A subject for another column.
As we all zero in on these bonuses paid to AIG the biggest red flag should be our borrowing habits from countries such as China.
To borrow a phrase often used by CNN’s Lou Dobbs, “The American people have had a belly-full” If more bailouts must occur to shore up this economy, they must be as transparent as crystal. We the people must demand so because we have worked long, hard hours and are sick of being suckered. It reminds me of that infamous saying coming out of the mouth of P.T. Barnum who once said, “There is a sucker born every minute and two to take him.” In our case we have been taken by many.