Government v. AIG: Hypocrisy Speaks
On the other hand, I am fed up with the sanctimonious expressions of anger and threats of retaliation emanating from Washington about the AIG bonuses. This is true hypocrisy in action.
Operating AIG as a Business
That is not what the politicians are screaming for. They all know (or should know) that booting the entire AIG management team will almost guarantee that AIG will not recover and the entire taxpayer investment will be lost. Yet these same politicians want to publicly excoriate the management team for the bonus program. This has caused some AIG managers to leave already. More are sure to follow, leaving a management void at AIG. These are retention bonuses after all, and retention is what is needed while AIG divests itself of certain businesses.
If these politicians knew how to operate a business, they probably wouldn’t be politicians. Most of them qualified for their present jobs by graduating first in their class from charm and glad-handing school.
Point those Fingers at Yourselves
Compared to all of the taxpayer money that Congress has wasted in recent weeks, the AIG bonuses are “chump change.” (I borrowed that phrase from a Congressman who used it while defending all of the pork in the spendulus and omnibus spending bills.) The complaints about AIG are a convenient way for Congress to focus attention away from themselves.
Now, if you want to talk about employment behaviors that cost taxpayers millions of dollars, there are plenty of places to look in the government sector. But we don’t hear any Congressmen or White House officials bloviating about them. I will mention a couple.
First, there is this story about an “epidemic” of disability claims being filed and approved by retirees of the Long Island Railroad. Apparently, the game being played in that business is that you retire (young and able-bodied) with a generous pension, then tell the LIRR that wait – you forgot – you are actually now disabled. Your disability claim is then rubber-stamped by complicit government railroad officials, which almost doubles your retirement income.
Get this – in one recent year 97% of new LIRR retirees applied for and received disability payments. Some of these bogus claimants are receiving $280,000 per year in combined benefits.
Now if you are thinking “who cares – that’s the railroad’s problem” you are overlooking the fact that railroad disability benefits are paid with taxpayer dollars by the Social Security Administration. Because the robotic morons on the Railroad Retirement Board approve almost 100% of these impossibly high disability claims, Social Security had to contribute $3.6 billion to cover railroad disability costs in 2007 alone. Most of them are likely phony claims.
Do the math – $3.6 billion compared to $165 million.
That bothers me a lot more than do those AIG bonuses. Read the article – I think you will agree with me.
Another example of taxpayer money run amok in the employment domain: Rampant “double-dipping” by government employees at all levels. In this article, we read about employees who “retire” for 30 days, receive a pension, then are promptly hired back by the agency where they had worked before “retiring.” Bingo – pension and a salary all at that same time. The article discusses state employees but this occurs at the federal level as well, although double-dipping federal retirees are often called “consultants.”
Don’t tell me this is fair. Government employees already have the most generous compensation and retirement benefits in our economy. Here is the hard truth from Forbes magazine and the Bureau of Labor Statistics:
In public-sector America things just get better and better. The common presumption is that public servants forgo high wages in exchange for safe jobs and benefits. The reality is they get all three. State and local government workers get paid an average of $25.30 an hour, which is 33% higher than the private sector’s $19, according to Bureau of Labor Statistics data. Throw in pensions and other benefits and the gap widens to 42%.
Sweet deal – get paid more to work, get paid even more to retire, then go back to work at the same job!
Final Thoughts on AIG and Government Hypocrisy
Why is there no outrage in Congress about these other wasteful employee-related expenditures of taxpayer dollars, which far exceed the AIG bonuses? The answer is that there are unions involved and unions supply votes. AIG employees – not so much.
I can no longer listen to Chris Dodd or President Obama complain about AIG without thinking they have bigger fish to fry in their own backyards. Unfortunately, they just don’t seem to care.
A final note – why aren’t we hearing from Tim Geithner about these bonuses? Could it be that he actually approved them?
What are your thoughts about the AIG indignation?