Wednesday, March 18th 2009, 9:18 PM
Reed/Reuters
Congressman Barney Frank (D-Mass.) speaks during Wednesday's hearing on Capitol Hill.
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We have met the enemy and it's the people who represent us. The blowhards and buffoons in Congress proved again Wednesday they are worse than useless.
Ronald Reagan's famous line that "government is the problem" kept going through my head as the AIG hearing demonstrated the dangers of Washington's role in the economy. The very people, Republicans and Democrats alike, who can't balance America's budget now claim the expertise to run banks, insurance companies and automakers.
If we let them, we're dumber than they are.
What was supposed to be a legal lynching of AIG boss Edward Liddy over the firm's bonus plan turned into a humiliating defeat for the lynch mob. Liddy came off as a smart straight shooter, a man who gave up retirement for $1 a year to rescue AIG so it wouldn't bring down the financial system.
He also proved himself a cut above those who aimed to make cheap headlines at his expense. I'd pay to see him question Congress on its role in the economic mess.
Most important, he revealed the dirty little secret that much of Washington knew and approved of AIG's promises to pay retention bonuses to members of its financial products unit. That revelation came early in Liddy's testimony and punctured the hot air balloon.
Liddy's matter-of-fact claim directly implicates the Federal Reserve, which he called the "gatekeeper" for the 80% of AIG owned by the taxpayers. He also said Treasury Secretary Tim Geithner knew of the bonus plan nearly two weeks before it became public.
Over to you, President Obama.
Much of the government outrage over the bonuses pool of $165 million was phony anyway, canned up for a public now being taught that the private sector is evil and must be punished. The real outrage is that the bonuses represented a fraction of the $180 billion of public money pumped into AIG without any real oversight.
Predictably, most of Liddy's tormentors steered clear of that topic, lest they be forced to make a tough call on a complex issue.
Liddy stands guilty of being tone deaf to the public anger on any bonus payouts at a time when people have lost their savings, their homes and their jobs. But as he repeatedly made clear, he came not to defend AIG's past, merely to clean it up.
That puts him head and shoulders above those in Washington who follow no star except merciless ambition.
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