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March 27, 2009

Comments

Jeff

A question about the first one...

Is it wrong for me to think the same, that it's pretty shady that some of the bailout money went to bonuses? Or rather, is it coveting? One of the prevailing thoughts I had was, "Now they're taking my taxes and use it to pay bonuses!?"

Jim Fleming

Most of the congressional and Presidential "outrage" over the AIG bonuses was for public consumption. These bonuses were based upon contractual agreements. People were being paid what their employer was legally bound to pay them for work performed.

The decision to use tax-payer money to pay these bonuses was made by the politicians who approved the AIG bailout. If those recommending and approving the bailout didn't know about these contracts, they committed taxpayer dollars without knowing what they were doing. Shame on them! If they did know about them, they could have insisted that AIG break its contracts as a condition of receiving bailout money. But when the government no longer protects the law and becomes an advocate of defying the law and breaking contracts, the ability of a market to function collapses for a lack of trust.

So, the government employed coercion (public shaming and onerous taxation) to take from someone else what was rightfully his. It said, "Yes, you are contractually entitled to what you have received from your employer. But, you should give it to me. I really deserve it, you don't."

This is the voice of envy and covetousness.

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