Like Bill Murray’s character in Groundhog Day, U.S. taxpayers seem caught in an endless cycle of frustration over the $700 billion federal rescue of the financial system.
It’s as if they wake every morning to an outrage by bailed-out companies, which are dutifully reported and denounced by politicians. Then it happens again. And again.
The latest is insurance giant American International Group paying obscene bonuses to its executives. Keep in mind that AIG lost $61.7 billion in the fourth quarter of 2008, nearly enough to bankroll Florida’s entire state government for a year, and has received $170 billion in taxpayer dollars so far to stay afloat.
President Barack Obama on Monday told Treasury Secretary Timothy Geithner to “pursue every legal avenue” to block the latest bonus installment $165 million for executives at a unit that nearly sunk the company and helped bring the nation’s economy to its knees. We wish him luck.
The moves by AIG are only the latest in a string of immoral acts from bailed-out companies. Over the past few months, there have been reports of billions spent by other government wards on bonuses, billions in dividends sent to their shareholders and millions spent lobbying Congress.
It is both incredible and infuriating that Washington apparently hasn’t demanded more restrictions on expenditures from companies that have been rescued with public money especially ones such as AIG, that have received multiple cash infusions. The Treasury is still acting like a minority shareholder when it owns 80 percent of the firm.
For the sake of taxpayers, the Obama administration needs to start waving a bigger stick around bailed-out companies. We hope Mr. Obama’s instruction Monday to Mr. Geithner is a sign of a new, tougher policy. We’re not so sure.
The president’s proposed spending plan for the next budget year leaves open the option of putting up another $700 billion to bolster the financial system. That gives the president and Congress another chance, this time from the get-go, to design a program that does a much better job of protecting taxpayers.
Their fate up to now calls to mind the title of another one of Mr. Murray’s movies: Scrooged.