Uncle Sam Plays Santa Claus
By Greg Hunter’s USAWatchdog.com
The government has made some pretty big financial announcements during the Christmas holiday season. So-called Pay Czar, Kenneth Feinberg, decided to boost the pay of an unnamed AIG executive by $4.3 million. Was Feinberg just playing Santa or taking strategic action to get the least attention possible while the media was busy with Christmas and snow storms? I’m going with taking strategic action to get the least attention possible. How about you? I guess it is a little hard to justify giving some executive a $4 million raise while more than 15 million people are out of work. The Pay Czar said the multimillion dollar raise was in line with other executives at AIG, and it was hard to retain “top talent” without such a big boost. Is this the same “talent” that helped bankrupt the company? Taxpayers who spent more than $180 billion propping up this failed company don’t even get to know the name of the person getting the raise. Feinberg sited “privacy restrictions” for the secrecy. We get to know the salary of the President of the United States but not this executive? Outrageous!!! This just backs up the point I made two weeks ago that the “Pay Czar” is just a public relations move. It is just a ploy to appease an angry public over Wall Street pay at firms bailed out by the government. Check out my post called “Pay Czar” Idea is a Crock!
In other Uncle Sam Santa Claus news, the government announced the two top executives at failed mortgage giants Fannie Mae and Freddie Mac will each get 6 million bucks to run these bankrupt businesses. Fannie and Freddie should have been taken straight to receivership and shut down, not pay two Wall Street weasels to keep these money losing companies afloat. Again, another announcement just before Christmas. The administration must think this is a great time to release an unpopular story.
That brings me to the biggest government Christmas present of all. The Treasury lifted the limit on financial aid available to Fannie and Freddie on Christmas Eve. There was a $400 billion cap on money to keep these giant money suckers in business, now the bailout goes to infinity. Last year when Fannie and Freddie became insolvent, the government took them over in the largest nationalization in U.S. history. Back then, the Treasury said it would cost the taxpayers $100 billion each. The maximum taxpayer cost would be $200 million. Taxpayers have already spent more than $111 billion propping them both up. So what gives with lifting the limits to infinity? I’d say 2009 and 2010 are going to deliver some pretty big losses to the failed mortgage giants. There is no way that the United States won’t get hit with big inflation at the very least.
Barack Obama has repeatedly talked about lowering the deficit. I don’t see how playing Santa Claus is going to accomplish this. If you want to shrink the deficit, then you have to play Scrooge! That would mean big losses to the rich and real sacrifice for most Americans. That is not going to happen, especially with midterm elections just 10 months away. We live in an age where good work and competence are penalized and failure and incompetence are rewarded.
This action is no different from the other actions taken by the President and legislators over the past many years. It has not mattered if the control was Democratic or Republican, the pay out to the fat cats has always been there. The differnce today is Obama ran on a platform to eliminate the influence of money on politics, but one just needs to look at the bailouts given the insurance industry with the health reimbursement reform bill to see this has not happened. Much the same with the mortgage companies, banks and other bailed out companies. Just monitor the best you can the amount coming back for the democrats in the 2010 election cycle to see who was bought off with these actions.
The tone, the content, and your opinion are right-on!
I learned something today; it was a small lesson that has huge implicications for our economy.
2010 is not going to be a great economic year. At best, we will see marginal growth and no real recovery. How can our economy grow with an out-of-control federal government? The federal government acting as Santa Claus with borrowed money combined with higher taxation and more regulation will not allow for robust economic growth.
Happy Holidays – its a good year to be a bank oligarch! ‘Top talent’ now thats ammusing…
Great Article Greg.
Is’nt that the truth! I would also add that we live in a time where the saver is penalized. .25% interest rate percent in a savings account is nuts….I suppose thats why most of my wealth is in my property and Gold. The government can’t change the fact that one ounce is one ounce, if you get my drift..
Have a happy new year.