Literacy, Stupidity or Lying?

Clearly, in this country, two problems prevail. One is stupidity and the other is illiteracy.

If we, as a nation, were not quite so stupid then the GOP just might have chosen a more viable candidate to take on Obama last November. Then, we compounded the felony by electing what must be the most stupid Congress in our history. Which leads me to illiteracy and I’m not talking about the deplorable state of many of our public school systems.

No, the illiteracy that concerns me more is the illiteracy of that same Congress and also, it seems the current occupant of the Oval Office.

For all kinds of reasons, I’ve really tried to stay away from the AIG feeding frenzy but now I feel that I would be remiss if I didn’t point out a few things as I see them.

It’s pretty obvious that a section of the American people fueled by much of the media as well as Congressional and Presidential blowhards have decided to yank the pitchforks and the billhooks out from the tool shed, light the torches, stream up to the castle, drag out the recalcitrants and impale them on pikes. And leading the charge is Obama and the Democrats in the House and Senate. So what did AIG actually do?

Well for a start they acted in accordance with laws both Federal and State. How heinous? But, before we get too deep into this, let’s acknowledge a couple of things. First of all we must separate what is ethical, what is legal, what is constitutional and what is smart? And sometimes some of these overlap but most of the time they really don’t and moreover, it really depends on where you happen to be coming from.

Let’s take the easier ones first. The head of any corporation has one primary responsibility which outvotes all the rest and that is to protect the investment of and maximize the return to the people who put up their money in the first place which clearly Mr. Liddy strove to do. Liddy was appointed Sept. 16, 2008 after the main damage to AIG had been done.

He came at the request of former Treasury Secretary Henry M. Paulson Jr. in the same emergency deal that gave the insurance giant its first $85 billion loan from the Federal Reserve. The government's goal was to save AIG from bankruptcy and spare the world economy from the consequences of the firm's failure. Liddy told Congress this week that he "came out of retirement to help my country." And his paycheck was and is $1 per year. So he’s hardly in it for the big bucks. As we said a moment or two ago, the damage to AIG had already been done so Liddy simply followed through on his mandate to salve what he could and perhaps rebuild the company.

Only some liberal economics professor in some liberal-dominated academic environment who has never held a real job in his or her life could claim that rebuilding a company is best done using losers. So part of Liddy’s strategy was to keep the winners and to keep them happy.

I know that some readers of this Blog are very close to the legal profession so I hope they will allow me to point out that, if you want to save money, it’s a good idea to stay away from litigation whenever possible. So here’s Liddy, making $1 per year and on the one hand his company is contractually obligated to pay bonuses in proportion to the terms of the contract and in proportion to the success of his winners. Another factor applies here too. AIG is based in Connecticut which has a statute commonly called the “Wage Law”. In essence this provides that any employee who can demonstrate that he or she has not been paid according to their contract is entitled to 200% of the shortfall.

So Liddy paid up as well he should especially when he knew that specifically written into law by Congress and ratified by Obama was wording that directed him so to do.

Now enter stage left comes the Democrats and Obama who now, after a lot of huffing and puffing, weeping and wailing and gnashing of teeth, seek to introduce legislation to single out these bonuses for penal taxation. Have these people never read the Constitution they are sworn to defend? The third paragraph of Section 9 specifically states that, “No bill of attainder or ex post facto law shall be passed”. Missing completely from that is any mention of any exception for a Barney Frank “hissy fit” or Obama's self-righteous humbug.

Remember now, Obama was the man who claimed that he would go through personally, “line by line” every piece of legislation before he signed it. So, is it that he can’t read? Is it that he’s too stupid to understand what he’s reading or is he simply not telling the truth?

Anyway, so far we’ve established that what AIG did was legal and specifically ordered by the federal government. It was constitutional and it is clear that any attempt to undo it would not be.

But was it ethical? Absolutely, because it preserved the contractual integrity between employer and employee.

Was it smart? In the short term atmosphere of pompous outrage, your guess is as good as mine. In the longer term? Yes I think so because we are a society of law not Barney Frank's hissy fits.

And when that changes I’ll be the first to grab my pitchfork.