Cheap Political Theater
by Thomas Sowell http://www.tsowell.com

Death threats to executives at AIG, because of the bonuses they
received, are one more sign of the utter degeneration of politics in
our time.

Congressman Barney Frank has threatened to summon these executives
before his committee and force them to reveal their home addresses--
which would of course put their wives and children at the mercy of
whatever kooks might want to literally take a shot at them.

Whatever the political or economic issues involved, this is not the
way such issues should be resolved in America. We are not yet a banana
republic, though that is the direction in which some of our
politicians are taking us-- especially those politicians who make a
lot of noise about "compassion" and "social justice."

What makes this all the more painfully ironic is that it is precisely
those members of Congress who have had the most to do with creating
the risks that led to the current economic crisis who are making the
most noise against others, and summoning people before their committee
to be browbeaten and humiliated on nationwide television.

No one pushed harder than Congressman Barney Frank to force banks and
other financial institutions to reduce their mortgage lending
standards, in order to meet government-set goals for more home
ownership. Those lower mortgage lending standards are at the heart of
the increased riskiness of the mortgage market and of the collapse of
Wall Street securities based on those risky mortgages.

Senator Christopher Dodd has played the same role in the Senate as
Barney Frank played in the House of Representatives. Now both are
summoning government employees and the officials of financial
institutions before their committees to be lambasted in front of the
media.

Dodd and Frank know that the best defense is a good offense. Both know
how hard it would be to defend their own roles in the housing debacle,
so they go on the offensive against others who are in no position to
reply in kind, given the vindictive powers of Congress.

This political theater is in one sense cheap beyond words. In another
sense, it is costly beyond words.

It is cheap because the politicians who are creating this distraction
from their own role also voted for the very legislation that enabled
contracted bonuses to be paid by companies like AIG that received
government bailout money. If members of Congress can't be bothered to
read the laws they pass, then they have no basis for whipping up lynch
mob outrage against people who did read the law and acted within the
law.

Just as everyone seemed to be a military expert a couple of years ago,
when it was chic to say that the "surge" in Iraq would not work, so
today everyone seems to be an expert on executive pay.

Whether the particular executives who received bonuses were the ones
responsible for AIG's problems, or were among those who warned against
those problems, is something that those of us on the outside don't
know. That includes those in politics and the media who are making the
loudest noise.

The politicians claim to be protecting the taxpayers' money. But
having politicians trying to micro-manage any business is far more
likely to make those businesses lose more money, including the
taxpayers' money.

Securities based on risky mortgages are what toppled financial
institutions but it was the government that made the mortgages risky
in the first place, by making home-ownership statistics the holy
grail, for which everything else was to be sacrificed, including
commonsense standards for making home loans.

Politicians and bureaucrats micro-managing the mortgage sector of the
economy is precisely how today's economic disaster began. Why anyone
would think that their micro-managing the automobile industry, or
executive pay across a wide sweep of other industries, is likely to
make things better in the economy is a mystery.

The real point is to pander to envy and resentment against people who
make a lot of money. Envy is always referred to by its political
alias, "social justice." But to put the lives of the wives and
children of executives at risk for the sake of Beltway grandstanding
shows how low our political saviors have sunk.

http://townhall.com/Columnists/ThomasSowell/

http://mises.org/etexts/Mises/anticap.asp