Re: $1.6B went to bailed-out bank execs FIRE THE BUMS

[David Farber <dave () farber net>]

Begin forwarded message:

From: Declan McCullagh <declan () well com>
Date: December 22, 2008 9:10:25 PM EST
To: Lauren Weinstein <lauren () vortex com>
Cc: dave () farber net
Subject: Re: [IP] Re:   $1.6B went to bailed-out bank execs FIRE THE  
BUMS

Lauren wrote:
> The news channels are all abuzz about how the banks who received the
> bailout billions are still paying and perking their execs like happy
> days are here again, and their fleets of corporate jets are still
> criss-crossing the skies. [...]
> For those of us who live hand to mouth, for whom a trip to Target or
> Walmart is a somewhat special treat, and just keeping the utilities
> running is a continuing nightmare, the attitudes of the "privileged
> class" with their limos and chauffeurs are as far removed from our
> daily existence as Alpha Centauri.

I enjoyed your post and largely agree. I've written a number of pieces  
about the bailout culture (that is, why we should be skeptical of it):
http://www.cbsnews.com/sections/politics/otherpeoplesmoney/main503363.shtml

A few things, though:

* You indicate that someone should be free to spend their money only  
if they earned it "in a useful way." Of course, who determines what's  
useful? You? Is Rush Limbaugh's show "useful?" How about anti-Net  
neutrality lobbyists? Or coal mining companies?

* I suspect one reason why execs get limos and private jets paid for  
by corporations is that they're tax deductible as a business expense  
if they're "reasonable." At least this is what the 10th Circuit ruled  
in 2001. Salaries in excess of $1M aren't tax deductible, thanks to  
the social engineering in the tax code, but these perks are. Welcome  
to the world of unintended tax law consequences.

* You're correct to say that the failed executives jockeying for  
bailout dollars "simply don't want to rub shoulders with the unwashed  
masses in overloaded security lines, cramped terminals, and commercial  
jets." But that doesn't go far enough. It's also Washington  
politicians and bureaucrats of both major parties who dislike waiting  
in security lines with the plebes who are forced to pay their  
salaries. Such important people (who can't be bothered with first  
class) include Hank Paulson, Nancy Pelosi, the U.S. ambassador to the  
United Nations, and even the Smithsonian Institution's Lawrence  
Small.* (Political campaigns do this too, borrowing private jets from  
corporations and reimbursing them pennies on the dollar. This is  
actually legal.)

Clearly the head of the Smithsonian, with its prominent anti-terrorism  
role, needs the additional security that $20,000-an-hour private jet  
travel can provide.

* Let's not overlook governors. Kentucky Gov. Ernie Fletcher almost  
got shot down when his private jet heading to Ronald Reagan's funeral  
didn't follow security protocols.***

As an FAA-licensed pilot, I can attest that bypassing the security  
theater (and ransacked luggage) of commercial aviation and going  
direct to your destination is a splendid thing. At least why I fly,  
though, I don't ask the taxpayers to pick up the tab.

-Declan

* Source:
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/19/AR2006091901389.html
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/26/AR2007032600665_pf.html
http://query.nytimes.com/gst/fullpage.html?res=9503E7DE1F3AF935A1575BC0A96E9C8B63
http://www.nypost.com/seven/02082007/postopinion/editorials/nancy_pelosi__carbon_criminal_editorials_.htm

** http://www.nytimes.com/2007/07/26/us/politics/26jets.html?pagewanted=all

*** http://www.washingtonpost.com/wp-dyn/articles/A35440-2004Jul7.html





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