Morning Bell: Government, Inc.
Conn Carroll /
“If you don’t return it on your own, we will do it for you.” So warned Sen. Chuck Schumer (D-NY) referring to the $165 million in bonuses paid to employees of the 80% taxpayer owned insurance company AIG. And how did Schumer plan to force those employees to give their compensation back? With a specially targeted 91% tax. Rep. John Dingell (D-MI) later upped the bidding to 95% but Rep. Steve Israel (D-NY) refused to be out demagogued and proposed a full 100% tax. Speaker Nancy Pelosi (D-CA) then demanded that the House Ways and Means Committee draw up legislation by the end of this week.
But these suggestions pale in comparison to what Sen. Charles Grassley (R-IA) wanted to see happen: “But I would suggest the first thing that would make me feel a little bit better toward them if they’d follow the Japanese example and come before the American people and take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide.” Ritual suicide seems a little harsh considering the $165 million in question makes up just .09% of the $173 billion the taxpayers have spent bailing out AIG.
But this is what happens when the federal government chooses to not just set the rules for free market competition, but to become a full fledged market participant. And under the Obama Administration, direct government participation in the market is expanding fast. Setting AIG and Wall Street aside for a moment, the Obama Administration has also seen fit to take over the auto industry, double down on Fannie Mae and Freddie Mac’s participation in the housing industry, and fast-track government control of health care.