One of the latest stories in the bailout is about the infamous $18 billion in bonuses paid by companies receiving bailout money. While this is hardly surprising, it is generated a great deal of righteous indignation and anger.
As far as not being surprising, it should have been obvious that these companies would pay out such bonuses. First, it seems that little or no strings or requirements were attached to the money-thus allowing the companies to legally pay out such bonuses. Second, the track record of such companies seems to indicate that the main concern of management has been personal gain rather than responsible financial action. In hindsight, it seems rather obvious that there should be some oversight in place before handing vast sums of money to people who are, by all the available evidence, greedy, incompetent and irresponsible. As such, the folks who handed over the money need to share some of the blame-they made it possible and did nothing to prevent it.
It might be argued that the bonuses are deserved, but that would seem to be a false claim. Bonuses are generally paid for achieving success and the companies that claimed they needed the bailout clearly were not having a successful year. Perhaps some people did amazing things and earned such bonuses legitimately-but that is something that must be proven. Further, even if they earn such bonuses, it seems rather inappropriate to pay out bonuses when companies are supposed to be in such dire straits that they need federal money to even survive. Such bonuses are especially grotesque in light of the massive layoffs in recent months and days. The idea that people in companies that helped wreck the economy are taking home bonuses while many people do not have jobs is rather disturbing.
If the government is going to throw money around, the folks in charge really need to establish some meaningful degree of oversight. To his credit, Obama seems to be genuinely angered by what has happened and seems intent on preventing further such incidents on his watch. Of course, he is hampered by the fact that so much money was dumped before he took office. As problems surface from the past bailout, they will be taken be some to be his fault.
Speaking of money, I just finished my taxes. Like most people, I’m not happy about paying taxes. But this year I felt even less happy than usual. After all, I work reasonably hard for my modest paycheck and I know that some of my money has been flushed down the federal bailout plan (or as I call it, “the magic money toilet”). I am not happy about that at all.
At this point, I cannot blame Obama (and hope he will do a good job), but I do blame Congress, the Bush Administration and, of course, the folks in business. Way to go.