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And you still don’t know the rest of the story

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By Jim Flynn

There were a whole bunch of April fools in the AIG bonuses explosion.

Citizens were fooled, because we aren’t told ten percent of what is going on in Washington. The only things transparent in Washington are secrecy and tomfoolery.

Former Secretary of the Treasury Henry Paulson was fooled by AIG when he negotiated the first payout. Paulson got snookered by the best of the high rollers in the shadow banking community. From his first testimony before Congress on behalf of the Bush Administration, Paulson signaled nervous uncertainty about the national financial meltdown and how to handle it.

Current Treasury Secretary Timothy Geithner was fooled by AIG while he was head of the New York Federal Reserve Bank. Geithner was a party to the arrangement to save AIG from day one. His “gee whiz, didn’t know about the bonuses” responses were never believable. Geithner came out of the bonus bungle looking like a highly educated and politically inexperienced dupe.

Our national ships of fools were in their usual places on Capitol Hill – the House and Senate. Democratic and Republican preoccupation with their political agendas have left them more vulnerable than usual to making fools of themselves.

House Speaker Nancy Pelosi is oblivious. She’s preoccupied with preventing reform of immigration and with passing legislation so fast nobody has time to read what they’re voting on.

Senate Majority Leader Harry Reid is similarly oblivious, with senior symptoms. He seems to make a bungle of everything, such as seating the Senator from the city of Blagojavich to represent the State of Illinois. Mr. Reid is currently busy overseeing his earmark toy train line from Los Angeles to Las Vegas.

Senator Chris Dodd from Connecticut gave the best performance of bonus tomfoolery. He started off with the Sgt. Schultz defense. He knew nothing. His fall-back was that AIG bonus language inserted by his finance committee came back from the House mysteriously changed.

Mr. Dodd finally conceded that he agreed to changes which allowed the bonuses because they were requested by the Treasury Department. Later, that was corrected to changes urged by Rahm Emmanuel, White House Chief of staff.  At all times Mr. Dodd acted and spoke in character – a Washington politician who has been in office too long.

April Fool! You know less about the U.S. goof to correct the AIG mess than you did when you started reading this column. But there’s more.

A populist crescendo rose in both houses of Congress, in both political parties, and among media personalities, when it was learned AIG had paid out $165 million in bonuses intended to retain the fast-talkers who created the disaster. The rationale is the execs are needed to unravel their mess.

President Obama chimed into the outrage briefly but backed off when it became clear nobody knew who told what to whom or when. The amount of spin made Washington sound like a high speed merry-go-round.

The most annoying spin came from talk-show hosts pointing out that the AIG bonuses were only two tenths of one percent of the bailout money. That ain’t the point. The firestorm was about government getting suckered in every bailout deal they’ve made so far.

We’re in the current financial mess because there was no one watching the store. At the behest of the Bush White House, for eight years the Securities and Exchange Commission (SEC) did nothing with its more than adequate authority.

It was all part of the game of letting the good times roll.

In its populist, show-off mode, our dim-witted Congress passed a bill to tax back 90% of the AIG bonus money. Marion County Congress people joined in.

Despite their bulging staffs, Congress people were too lazy to consult Article 1, Section 9 of the Constitution which prohibits bills of attainder. Attainder means taking away individual civil rights without trial or conviction. In this case it’s called a bill of pains and penalties.

Mr. Obama likes to mention that he taught constitutional law for ten years. He should have phoned his party leaders in Congress and told them to back off making further fools of themselves with the tax penalty bill. He knew better.

The Congressional ship of fools is setting forth a best case for term limits.

Their sloppy bailout bills, pork-laden budgets, and slip-shod oversight should raise a louder popular uprising than their carping about the bucks scooped up by the AIG crowd.

Unfortunately, the Supreme Court says federal term limits are unconstitutional. Perhaps if we slipped them into an appropriations bill as an airborne (hidden) earmark, nobody in Congress would notice.

Jim Flynn was formerly a corporate counsel, served in military intelligence during the Korean War and once aspired to be a newspaper columnist.