ObamaOdrama

Fox Business uncovers emails regarding the governments advance knowledge of AIG’s intent to provide bonuses.

In a Nov. 5 e-mail to a Treasury and Federal Reserve officials, who were under the Bush administration, an outside attorney working on the transaction wrote, “We indicated that UST (United States Treasury) … wants to put in place a limitation on annual bonuses that assure that (AIG: 1.2, -0.39, -24.53%) executives/employees will not be enriched out of TARP funds.”

But the e-mail indicates AIG officials pushed back on the proposal. In a section of the e-mail discussing proposed limits on severance packages for AIG employees, the attorney wrote, “They were slack jawed at the idea of imposing the restriction throughout the entire population, especially worldwide.” AIG proposed that Treasury apply such limits “to a class of partners and senior partners (700).”

At another spot in the e-mail, the attorney said about AIG executives, “They will think about ways to deal with the ‘no enrichment’ point. In this connection they again raised the size of the applicable group and kept coming back to ‘700’ as a meaningful, and possibly workable, group for limitations.”

The e-mail also indicates that in their deliberations, government officials were concerned about the effect of compensation on recruiting and retaining AIG employees.

“We also indicated that all parties understand that the restrictions must be designed so that the business can be operated in a reasonable way, including in terms of recruitment and retention of employees,” the attorney wrote in the e-mail.

The government eventually restricted compensation at AIG to just the top 75 executives.

How much longer can the government get away with throwing AIG under the bus to cover it’s own mistake?

U.S. Rep. Ron Paul (R-Texas) appeared on CNN’s American Morning last week and offered some insight on the AIG outrage.

CHETRY: … AIG debacle, congressman, what do you think? What do you think about why it happened?

PAUL: Well, it happened because we did something that was outrageous. These bonuses are outrageous — $165 million is a lot of money — but so is $700 billion of unconstitutional appropriations. That’s where the problem came from.

So yes, people are concentrating on these bonuses right now, but they’re missing the point. The point is that we shouldn’t be in the business of bailing out all these companies. And we don’t even know where the rest of the money went. We just discovered — probably inadvertently — that there were bonuses.

Now everybody is outraged — which they should be — so what do they do? They passed $700 billion worth of unconstitutional appropriations; then they come in and they discover this. The public gets notice of it, so the Congress has to act and feel outraged. So they pass a bill which is an ex post facto bill as well as a bill of attainder, which is unconstitutional, so they’re using the tax code to punish people. So they do one harm — one thing wrong — they create a problem an unintended consequence; then they go back, and they will solve the problem by more of the same.

If Ron Paul keeps this up, I may have to really start taking him more seriously.