Geithner's AIG Response Turning U.S. Into Cuba... Without the Great Cigars

Treasury Secretary Tim Geithner announced today that he is going to force AIG to reimburse the government for the $165 million in bonuses the company paid out after receiving more than $170 billion in bailout money. In addition, the Senate Finance Committee is proposing a 35% excise tax on the AIG bonuses, in addition to the 35% income tax already levied.

Now I'm not defending AIG or their bonus structure. Any company that is so terribly mismanaged it requires hundreds of BILLIONS in government assistance to prevent the collapse of the world economy probably had a pretty bad year. My understanding of corporate incentive and bonus programs is that they reward good work - either at the corporate or individual level - usually measured in terms of revenue or profit. I've gotten a few bonuses in my life. I've also had years when I didn't get one. There are no indications AIG's employees would qualify under those terms. That said, it appears AIG's bonus structure was actually a "retention bonus", which would imply they work similarly to roster bonuses in professional sports where the employee/player receives additional compensation just for sticking around. In that sense, AIG employees are totally entitled to their bonus. (I'll ignore for now reports that bonuses were paid to at least some employees who are, in fact, no longer with the company.)

However, equally concerning to AIG's baloney bonus structure is the government's response. I for one am not that comfortable with the government forcing American workers to pay back money they "earned" (or received in compliance with contracts both parties, presumably, entered into willingly), simply because said government didn't have the foresight to dot their I's and cross their T's before handing over hundreds of billions in taxpayer dollars. I also am not that comfortable with the government threatening to create new taxes applicable only to this subset of American workers to punish them for cashing their bonus checks.

Technically, the U.S. government is now a 80% shareholder in AIG and as such has the power to put rules in place to prevent such bonuses from being issued in the future. In fact, it would be irresponsible of them NOT to do that. However, imagine your company gets a Chairman and that chairman decides that you need to pay back your bonus or part of your salary from the previous year. What would you do? I'd tell him to go screw. Then I'd probably be looking for a new job, because it turns out Chairmen generally frown on that sort of insubordination.

What about the rest of the bailout money being handed out? If the government thinks they can start dictating corporate policy, canceling executed contracts, and creating new laws aimed specifically at individual companies and entities, this starts to look a lot like a Communist state. I'm not trying to be a sensationalist, and I'm not some bitter, right-wing loony trying to come down on the "damn liberals". (I voted Obama, ok?) But I gotta say... today's announcement is a little concerning.