Limbaugh defense of AIG bonuses follows attacks on "insane benefits" of UAW sending Big Three "down the tubes"

As Media Matters for America has documented, Rush Limbaugh has repeatedly defended American International Group (AIG) from criticism of its employee retention bonuses. By contrast, in December 2008, Limbaugh criticized the United Auto Workers (UAW) for the contracts it had negotiated with automakers. During the December 12, 2008, broadcast of his nationally syndicated radio program, Limbaugh stated: "[T]he Big Three are going down the tubes in part because of both the insane benefits for current workers, and the crazy compensation for retirees." During the same broadcast, Limbaugh commented on retiree benefits in UAW contracts, stating: "You can't pay people who produce nothing for you. And you can't pay a whole bunch of them over and over again who don't do anything, even if they have in the past." Limbaugh added: "[L]ook at where it's got you. Your company's being bankrupt or bailed out or what-have-you. It ain't healthy. The purpose of this country is not to see to it that the United Auto Workers get paid when there aren't any cars being made. That's not the purpose of the United States of America."

As Media Matters has documented, Limbaugh declared on his March 17 show, "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." In addition, on March 16, Limbaugh challenged a caller who opposed the bonuses. The caller said, "I do agree with [President] Obama trying to get these bonuses back from the AIG execs because, I mean, that's our money." Limbaugh replied, "Let me ask you a question. ... You have a company -- let's take AIG out of this 'cause they're so emotionally charged. Let's say that the company being bailed out is the XYZ Widget Company. ... We need them to manufacture widgets and sell widgets and so forth. So why in the world -- or how do you get to the point where you're going to bail out the company, but you don't want the employees to get paid?" Limbaugh later added: "[T]his is not just executives, but executives are employees, too. And in many of these firms, Nathan, their salaries are pretty small. They work on bonuses, via contract based on merit."

From the December 12, 2008, broadcast of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: OK, so Toyota, $30 an hour versus the UAW, 28. So fire [UAW president Ron] Gettelfinger for getting you an inferior deal. But that's not the answer. See, I'll guarantee you something, Mr. Krueger. I'll bet you Toyota's not paying 700,000 people every year full wages and retirement who no longer work. I know the UAW has made some concessions on wages, but they haven't made any concessions on the stuff that's really costing.

I'm all for you guys making everything you can. I'm -- I've said this I don't know how many times. I'm not against anybody earning what they can get. You are worth what somebody will pay you, unless you're in a union, and then you're only worth what your thug leader can get for you. In this case, you're getting $2 an hour less than the people at Toyota are getting. If that's even true. I don't know that that's -- I've heard that the sum total of the UAW package is actually $55 an hour when you add everything up. I mean, I don't know what to believe about all this.

All I know is common economics, and that is you cannot pay 700,000 people every year for doing nothing as though they're still working full-time. You cannot do it. You cannot do it in perpetuity, or you are in heap big trouble. I don't care if somebody made that deal long ago or not. The bill has come due. What I do know is that in 2007, Mr. Krueger, Toyota and General Motors sold almost the identical number of cars -- 9.37 million. I also know that Toyota made $17 billion selling their 9.37 million cars. I know that General Motors lost something like $28 billion selling their 9.37 million cars.

Now, I don't know all the things that contribute to the difference in Toyota's profit and General Motors' loss, and I doubt that it's all labor costs. I don't think it's -- the disparity can be that large simply because of labor, but it's certainly a factor.

But I'm not against you guys. But I'm against -- I'm just a classic Econ 101 guy. There's just some things I know that used to be common sense. You can't pay people who produce nothing for you. And you can't pay a whole bunch of them over and over again who don't do anything, even if they have in the past. We had a deal, we had a deal -- yeah, well, look at where it's got you. Your company's being bankrupt or bailed out or what-have-you.

It ain't healthy. The purpose of this country is not to see to it that the United Auto Workers get paid when there aren't any cars being made. That's not the purpose of the United States of America. The purpose of the United States of America is not to have Democrats run around telling people that that's the kind of deal they can get if they elect Democrats.

[...]

LIMBAUGH: You have to look at earned benefits versus cash compensation. When Gettelfinger says that a UAW worker makes $28 an hour, and a Toyota worker makes $30 an hour, that's cash compensation. By the way, it happened for one year, I think, when the Toyota people bonused some of their employees six grand for a job well done. But we know that Toyota people don't make $2 an hour more than UAW people on the cash -- earned cash compensation side. They may have for a year or two, but it's -- otherwise, the UAW would be moaning and griping to high hell about their inferior contract.

Cash compensation, earned benefits. It's the earned benefits that make the UAW's compensation so much more, and that's why their union leaders can lie saying they earn less than Toyota. When they say that, they're only talking about the cash, the hourly wage.

Now, James Sherk at the Heritage Foundation says that the $70-an-hour -- it's actually $73 -- $73 an hour cost to employ one United Auto Worker does not include -- Snerdly, are you listening to this? -- $73 an hour that it costs to hire and employ one United Auto Worker in the Big Three, does not include the cost of supporting former workers. That is these -- the Big Three are going down the tubes in part because of both the insane benefits for current workers, and the crazy compensation for retirees.

Now, cash compensation is basically the hourly wage. Earned benefits also amount to $33.58 an hour, 46 percent of total compensation. Earned benefits include hospital, surgical, prescription drug benefits, dental and vision benefits, group life insurance, disability benefits, supplemental unemployment benefits. Pension payments to workers' pension accounts to be paid out at retirement, unemployment compensation and payroll taxes. That's the earned benefits.