I’ve been following, with interest, the bonus flap over at AIG.  Who isn’t?  Perhaps, like you, I was outraged when I first heard the news that they had paid bonuses (large ones) after taking so much money from the government (read: taxpayers).  Of course we were, that’s how the media and government wanted us to react.  That’s how all the quotes and stories are slanted.  At least, most of them.

Michael Lewis is one of my favorite writers, and has been ever since I read “Liar’s Poker” – his unique view of tradition, customs and business situations makes him an interesting counterpoint to many of the “business analysts” out there that have never actually had any experience in business.  He has written a piece about the bonuses that I think is excellent – you can read it here. Another opinion article makes similar points here.  Both of them lead me to wonder why we believe the over-reacting publicity hounds that we call politicians, most of whom are the same ones that were in office when this financial mess was created, have the ability and werewithal to fix it.  Or even the intellect.

I’ve read all sorts of quotes from members of Congress telling banks, auto companies, and everyone else how they need to manage their respective businesses, and what they are doing wrong.  Now they want the ability to seize financial companies, so they can control them.  They seem to take their cues from whatever is popular at the moment.  What credentials do they have to do this?  Most of them have never worked in the business world (except for political consulting), and I suspect, if you took away their Congressional titles, most would not even qualify for a mid-level job at any of these places.  Why should their opinion carry more weight than any of the rest of us?  Because they control a bigger checkbook?  Money (even money taxed from other people) gives them the “wisdom” of always knowing the best course of action?  I don’t think so.

I also find it terribly ironic that the “excesses” that Congressmen are railing against in the business world “on the taxpayer’s dime”, so to speak, are ok for a Congressman.  Do as I say, not as I do.  For example, it’s ok for Congressmen to fly in a private jet on “fact finding missions” on the taxpayer’s dime, but heaven forbid a company that has taken taxpayer money do the same thing.  What do Congressmen eat?  Who pays for their entertainment?  Why do we allow them to demand things of bailed out companies, when they can’t even balance the budget themselves?  Not that I agree with the bailout of GM, but honestly, how is GM operating at a loss for years any different than a Congress that operates with a “fiscal deficit” for years?  And yet, different standards apply to Congress?  Why don’t they demand their own ranks take pay cuts, or make outrageous comments about themselves committing suicide if their budgets don’t balance or their policies waste money?  Why the double standard?

And now that I’m ranting, how is the Congressionally produced, and now fully entrenched, ponzi-scheme known as Social Security any different from the Madoff ponzi scheme, except in size, besides the fact that Madoff’s investors had a choice?  What was supposed to be a savings program has evolved into a “pay-as-you go” (ponzi) scheme which depends on an increasing birth rate.  That brings up another point – why are our politicians so intent on copying Europe when it is obvious to anyone who wants to see that Europe’s socialist policies are leading it quickly to bankruptcy?  Europe has universal health care, so we need to have it, even though everyone complains about the care you get under universal health care?  Europe’s model has regulated them to a supporting role in the world economy, and now we want to copy them?  Where is the wisdom in that?

Ok – sorry.  I’m getting all worked up over this, and I’m straying off topic.  The point I’m trying to make is one quoted often by my favorite financial newsletter editors at Stansberry: the government has a “record unblemished by success”.  So why do we still listen to them?  My friend recently posted about this on his blog, with a group that has high aspirations of making a difference – check it out here.  But whatever you do, don’t make the mistake of believing the politicians know more than you do, so they must know what they are doing.  Unfortunately, their actions don’t justify it.