This week on Capitol Hill, Republicans and Democrats found something they could finally agree upon: the huge insurance company American International Group is way out of line in its plan to award bonuses of at least $1 million each to 73 employees after being given $170 billion in bailout money from the federal government last year. President Barack Obama described himself as ‘choked up with anger’ over AIG’s decision to still award bonuses despite receiving taxpayer money. Iowa Senator Charles Grassley went to an even further extreme, recommending that the AIG executives should ‘resign or go commit suicide.’
Grassley and some other politicians are most likely going over the top in their reactions to provide the media with a good sound bite, but the outrage in Washington D.C. and across America is justified. Petty issues too often distract the news media and politicians, as evidenced by how long First Lady Michelle Obama’s bare arms were discussed. It is refreshing to see this kind of coverage devoted to a serious economic issue for once. It is clear that Americans want Congress and Obama to take action to ensure that their money is not going toward executive bonuses.
However, it is important to note that the issue of bonuses is not necessarily as simple as politicians make it out to be. AIG did not just decide to hand out bonuses on a whim, it was a part of employee contracts there were signed in early 2008. This doesn’t make it all right for AIG to go ahead and give out millions of dollars in taxpayer money to its executives, but it shows that the government also must take responsibility for allowing this to happen when it bailed out AIG in the first place. This raises the troubling question, if AIG can get away with giving out bonuses after accepting federal bailout funds, what are other bailed-out corporations doing with their money that could be betraying taxpayers? Obama and Congress must learn from AIG’s outrageous actions and ensure that taxpayer dollars will not be abused by the private sector in the future.
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