Maternal Wisdom on AIG
By Rachel Dry
I should always listen to my mother. She is always right. I know this, and yet I often -- too often, I suppose -- fail to act on it.
Usually, my own mistakes and missteps are enough to remind me of the error of disputing maternal wisdom. Today is the first time that congressional Democrats helped drive home the point.
Here is a rough transcript of a conversation that my mother and I had on Sunday about the AIG bonuses:
Her: Can’t they just tax it all? Can’t they write a law to make it 100 percent taxable?
Me: I don’t think so. It’s more complicated than that. They’re contractually obligated to pay them.
Her: What do you mean? Just tax it 100 percent!
Eventually we changed the subject.
Her populist outrage is being channeled from Vermont, where, it is fair to say, there aren't many people receiving bonuses from bailed-out financial institutions. She did allow that, perhaps, there were some hard-working AIG employees who had little or nothing to do with the decisions that exposed the company to such substantial risks related to credit default swaps. But still. Why should they have all that money?
So, when I called this afternoon to refer her to the news that Sens. Harry Reid (Nev.) and Max Baucus (Mont.) and Reps. Steve Israel (N.Y.) and Tim Ryan (Ohio) essentially agreed with her, she was happy to hear that someone, somewhere thought better of letting a company that had received more than $170 billion in taxpayer bailout money in the past year dole out $165 million in bonuses.
The proposal Senate Democrats are set to unveil tomorrow to tax up to 98 percent of the bonus money seemed to her to be very similar to the windfall profits tax for oil companies. And it seemed to be a reasonable response to the situation -- more reasonable than insisting your hands are tied.
“Everybody kept saying we can’t do anything, it’s in the contract. Well, you can tax, buddy.” Indeed. Spoken like the veteran C.P.A. that she is.
Then, because she is busy at work as the director of student financial services at the University of Vermont -- where she and her colleagues are concerned that the economic downturn is creating more financial need for students than ever before -- she conceded that it was nice to be right but didn’t even take a moment to gloat. Her staff is getting out its financial aid awards to admitted students this week. So she ended the conversation with one final question: “Can I get back to work?”
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