Anyway, the money the government shells out to AIG is not supposed to be an allowance. It’s supposed to be the minimum necessary to rescue the company, which is supposed to be absolutely necessary to save the economy. If $165 million or $469 million or any other amount can be trimmed from the bailout without serious harm to the country, why is AIG getting that $165 million or $469 million in the first place?
Like everything about the bailout — and Obama’s economic policy in general — these “retention bonuses” are being presented as a tragic necessity. You may not like it — heck, we don’t like it either — but we have no choice. Earmarks in the budget? Look, let’s just get past this so we can move on. In a way, this is terrific. Tragic necessity is a concept that has been missing from the American political dialogue. Generally, politicians present every proposal as wonderful in every way, with no downside. But tragic necessity is a get-out-of-jail-free card that loses value if it is used too often, and Obama is going to need it later, when he takes on health-care reform, entitlements, the budget deficit and other delights.