A presidential appearance
Obama also visited Leno during his campaign.
Last night on “The Tonight Show with Jay Leno,” Barack Obama became the first sitting president to make an appearance on a TV talk show. Obama sat down for an interview with Leno, and the two discussed, among other things, the AIG bonuses and the new bill to tax those bonuses at 90 percent.
Obama speaks on lack of oversight
After some initial small talk, Leno quickly turned the subject to the outrage surrounding AIG bonuses, which were handed out after the government gave the company billions in cash advances. Obama explained a bit about the history of the company and blamed the inherent lack of accountability in the system for causing AIG’s downfall.
“The problem is not just what’s happened over the last six months. The problem is what was happening for years, where people were able to take huge, excessive risks with other people’s money, putting the entire financial system at risk –- and there were no checks, there were no balances, there was nobody overseeing the process,” Obama said.
Leno worried about tax bill
Obama and Leno talked about HR 1586, which is currently being revamped in the Senate. The bill would tax any bonuses handed out at bailed out companies at 90 percent. Leno said he was worried that Congress had the power to decide to tax certain groups of people, seemingly on a whim. Obama assured him that the bill is an attempt to correct the AIG situation, not to set a precedent.
Obama on taxes
Obama said he wants overall tax policy to show slow and steady progress. He emphasized that taxes should be used to pay for health care and education for everyone.
He says he’d like a system “where you and I who are doing pretty well pay a little bit more to pay for health care, to pay for energy, to make sure that kids can go to college who aren’t as fortunate as our — as my kids might be.”
I’m starting to think the bonuses weren’t exactly the worst thing in the world, considering the bonuses AIG handed out were less than 1/10th of a percent of the funds that they got, and a retention bonus is somewhat justifiable if it keeps quality people around that will turn AIG around so they can repay the taxpayers. However, there is a far more systemic problem that the bailout isn’t addressing – these huge firms that are worth untold billions, made their fortunes on derivitave trading, a practice which creates artificial value. Look at Wal Mart: no real danger, they don’t need a bailout. Why? Because they sell goods and provide services to customers – there is a demand that they are supplying. AIG, large portions of B of A and Citigroup, all do not. Perhaps that is why they failed. If no one is buying what you’re selling, your company is going under.