Conservative movement divided on two fronts over AIG

To: Interested Parties

From: Jessica Levin, Media Matters for America

Re: Conservative movement divided on two fronts over AIG

Date: Thursday, March 19, 2009

As Media Matters for America has recently documented, there is an emerging split between conservatives on Capitol Hill and conservatives in the media over American International Group's (AIG) employee bonus packages. The Washington Post's Greg Sargent noted this schism yesterday:

Mitch McConnell recently blasted AIG's bonuses as an "outrage." John Boehner said that the "American people are rightly outraged." And Eric Cantor bemoaned the "stunning lack of accountability" on AIG's part. But increasingly, leading conservative media figures are moving in a different direction: Defending AIG.

Media Matters has noted several examples of conservative media figures defending AIG:

• Rush Limbaugh

On the March 17 broadcast of his nationally syndicated radio show, Limbaugh declared, "A lynch mob is expanding: the peasants with their pitchforks surrounding the corporate headquarters of AIG, demanding heads. Death threats are pouring in. All of this being ginned up by the Obama administration." Later Limbaugh claimed, "This $500,000 limit on executive pay -- let me tell you why it won't work. New York City will die. New York City needs a whole bunch of people being paid a whole lot of money, so they can tax their butts off, so that the city can maintain its stupid streets, potholes, and welfare state. Without the super wealthy in New York, it's over. ... This -- it's just a populist ruse. It's just designed to people go, 'Yeah, yeah!' "

• Sean Hannity

On the March 17 edition of his syndicated radio show, Hannity aired Sen. Chuck Schumer's (D-NY) statement that if AIG employees do not voluntarily return their bonuses, "we plan to virtually tax all of it. ... [W]e'll put in place a new law that will allow us to tax these bonuses at a very high rate." Hannity then stated: " 'Tax all of it.' In other words, Chucky is coming for you. The government is coming to get your money." Hannity later added: "Whether you like the AIG bonuses or not, think about this: They're going to make a law, and they're going to tax every single penny of it, virtually all of it. In other words, we're going to just steal their money. And they're not going to be able to do a darn thing about it, because we're the government, and if we decide we can confiscate all of their wealth, we're gonna do it."

• Glenn Beck

On the March 18 edition of his Fox News show, Beck stated that by proposing to recoup the AIG bonuses, Congress is not "trying to solve this problem" but rather trying to "channel the outrage away from their roles" and "direct it toward the faceless bonus recipients at AIG." After stating that he doesn't "like the idea of failed businesses paying bonuses," Beck stated: "But what I really, really don't like here is the idea that we are willing to give in to mob rule, and that's what this is." He added: "I mean, the only thing they haven't said is, 'Bring out the monster.' It's mob rule. They are attempting to void legally biding contracts."

In addition, while congressional Republicans are now criticizing Democrats over a provision in the stimulus bill restricting the ability of companies receiving federal funds to pay employee bonuses in the future -- with Republicans saying that Democrats should have ensured the restrictions applied retroactively -- several Republican senators previously took a different position on government involvement in employee compensation. But media have given little attention to this inconsistency. For example, in reporting on the NRSC's attack on congressional Democrats, Time's Jay Newton-Small ignored several recent examples of Republicans -- documented by The Huffington Post -- decrying government intervention in executive compensation:

• Sen. Mel Martinez (R-FL)

"What executives have done is troubling, but it's equally troubling to have government telling shareholders how much they can pay the executives."

• Sen. Jim DeMint (R-SC)

"If you accept the fact that the government should be setting pay scales in America, then it's hard not to go after these exorbitant salaries. But I think it's a sad day in America when the government starts setting pay, no matter how outlandish they are."

• Sen. Bob Bennett (R-UT)

"Some of the things some of these bank executives have been doing demonstrates they have a tin ear. At the same time, I'm generally troubled by wage and price control, no matter how logical it may appear."

• Sen. Jon Kyl (R-AZ)

"Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That's not a good thing in America."

• Sen. Kit Bond (R-MO)

"If Congress can run a financial institution, it belies everything I've seen in this body. Government does not do a good job running private institutions."

For more information on the media's coverage of the AIG bonuses, please visit: www.mediamatters.org