"We will hunt you down!" thundered Colorado Democratic Rep. Jared Polis during the AIG bonus demagogue-a-thon on the House floor Thursday. "If they're not going to give [the bonuses] back, we're going to take them back," growled Alabama Democratic Rep. Artur Davis, who vowed to recover the taxpayers' "ill-gotten gains" from rogue corporate executives. House Republicans pressed the Democrats on who knew what and when regarding the AIG bonus protections included in Connecticut Sen. Chris Dodd's now infamous amendment to the stimulus bill. Rep. Barney Frank shrieked about the Bush administration's culpability. House Speaker Nancy Pelosi smugly patted Democrats on the back for "protecting the national interest."
I ask you now to turn away from the bogus bonus smokescreen over $165 million in taxpayer-backed compensation packages for AIG employees. It is a pittance compared to the gargantuan spending spree happening right under our noses. The AIG bonus price tag amounts to one tenth of 1 percent of the total AIG giveaway ($85 billion in September, $37.8 billion in October; $40 billion in November; $30 billion in early March), which took place with the assent of a Republican administration, a Democratic administration and the congressional leadership of both parties.
Taxpayers might be less skeptical of the born-again guardians of fiscal responsibility if these evangelists were actually practicing what they preached. While the Obama administration now issues impassioned calls to stop rewarding failure, they moved Thursday to dump another $5 billion into the failing auto industry. That's on top of Thursday's announcement by the Federal Reserve to print $1 trillion to buy Treasury bonds and mortgage securities sold by the government -- which no one else wants to buy.
Financial blogger Barry Ritholtz tallied up $8.5 trillion in bailout costs by December 2008 between Federal Reserve, FDIC, Treasury and Federal Housing Administration rescues (not including the $5.2 trillion in Fannie and Freddie portfolios that the U.S. taxpayer is now explicitly responsible for). Then there's the (at least) $50 billion proposed by Treasury Secretary Tim Geithner in February to bail out home owners and lenders who made bad home loan decisions, which would be just a small sliver of the $2.5 trillion he wants to spend on the next big banking bailout, which would draw on the second $350 billion of the TARP package over which an increasing number of Chicken Little lawmakers are having buyer's remorse.
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