The Obama Watch

Obama’s Penal Code

The AIG sideshow and his view of taxation.

By 3.19.09

Barack Obama allowed himself another moment of juvenile socialism this week, quickly assenting in principle to the Democrats' proposed penal use of taxation against AIG executives. Even Charlie Rangel, chastened by his own tax troubles, hesitated at the sound of his colleagues' raw Bolshevik braying. "It is difficult for me to think of the code as a political weapon," Rangel was quoted as saying.

Not so for Obama. Taxation is his avenging angel. But why doesn't his avenging angel, while he's at it, also swoop down and take money away from other publicly financed failures? Perhaps it is time for an excise tax on the bonuses of principals at disastrous public schools. Or how about an excise tax on the ballooning salaries of bureaucratic managers whose social-engineering schemes extend pathologies year after year?

No, in the special-interests sweepstakes that is Obamaism, failure produced by liberal recklessness is to be rewarded generously: public-school teachers can expect to see their salaries rise as test scores fall; bureaucrats are more likely to receive bonuses for enlarging their client case load than reducing it.

Obama gets worked up about rewarding failure at AIG, but rewarding failure has never stopped him before. Indeed, rewarding failure is the organizing principle of liberalism; the squeaky, destructive special interest almost always gets the grease. It complains about some needless or corrupt government project failing, demands more money for said project, and in short order receives more millions to waste. Were AIG executives a liberal special-interest group, they could expect bonuses for years to come.

Obama's supposedly transcendent, fresh politics is drearily familiar, a populism of the cheapest and most unimaginative sort. Yet another week is wasted on a nothing issue.

Instead of focusing on problems at AIG, its government-appointed head, Edward Liddy, had to belly up to the socialists' scapegoat-spit and spin it around a few times while pretending to explain to Congress what it already knew and permitted, all so that Chuck Schumer could find a microphone and say to bonus-receiving executives, "If you don't return it on your own, we will do it for you."

The legality of AIG's bonuses is due to the incompetence of the Obama administration: Treasury Secretary Tim Geithner, who had awarded himself an inadvertent bonus through clueless tax evasion and still got the job, apparently just didn't notice them. In other words, the Obama administration is using an outrage it helped create to justify a new one -- the hasty, amateurish use of taxation as an instrument of retaliation.

Earlier in the week Obama's press secretary, Robert Gibbs, captured the cheapness of this presidency by indulging in a sophomoric slight at Dick Cheney. Not even Clinton's shabby and immature press aides ever behaved that boorishly. The touchiness of Gibbs was particularly gross and hypocritical given that the Obama campaign spent a good year or so defaming Cheney at every chance. Cheney has every right to unload on them.

In their Olympian arrogance, Obama and his surrogates can dish criticism out, but they refuse to take it. Notice that Gibbs' idea of a comeback was to gloat over Cheney's unpopularity.  

The Obama presidency is as much or more of a demagogic "permanent campaign" than Clinton's, moving from one phony, poll-tested issue to the next. During the campaign Obama pandered to crowds by promising to confiscate the wealth of oil executives. Now, seeking more quick applause, he finds another villain of the hour and sanctions confiscatory excise taxes for AIG executives.

His political gain is the economy's loss. Turning the tax code into a penal code will just frighten markets even more.

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About the Author
George Neumayr, a contributing editor to The American Spectator, is co-author of No Higher Power: Obama's War on Religious Freedom.