Tuesday, March 17, 2009

AIG Bonuses

Do you know what's most infuriating about this AIG bonuses debacle? That much of the anger directed at AIG and the executives and traders who will receive this money will spill over on the Obama administration. And deservedly so, in my opinion, as the Treasure Department "reluctantly" approved the bonuses even before news of them became public, and Obama himself apparently didn't become outraged about them until yesterday even though the Treasury Department has known for months that the bonuses would be an issue. And now Obama has ordered Treasure to "pursue every single legal avenue to block these bonuses" but the only plan proposed thus appears-ridiculously-to be a plan to "recoup" the bonus payments with future bailout money! It is not possible to overstate how weak it makes the Obama administration look that they cannot prevent the payout of egregious bonuses to the very people who produced the present crisis at AIG, even as the administration is lining up to give AIG another $30 billion. This will damage not only future efforts to contain the credit crisis on Wall Street (though who even knows what those efforts are yet?) but also efforts to get future stimulus legislation through Congress if and when it becomes necessary. What's truly angering is that this all appears to be an entirely self-inflicted wound. Had the Geithner and the Obama administration anticipated this crisis, they could've pressured AIG quietly in advance to ditch the bonus idea or forfeit the possibility of future bailout money. Now, they can only make a half-assed effort to get money back that's already been paid out, and run the risk of looking completely impotent in the face of AIG executives whose company is on the public dole. Unbelievable.

UPDATE: And now members of the Obama administration are trying to throw Sen. Chris Dodd under the bus, blaming him for a provision in the American Recovery and Reinvestment Act that allowed AIG to hand out bonuses last Friday (via Glenn Greenwald.) Except oops...that's not true. As Jane Hamsher explains, Dodd actually pushed for a provision that would've prevented such bonuses, and was talked back from it by-can you guess?-Geithner and the Treasury Department.  So to recap...the Treasury Dept. approves the bonuses, is caught off guard by popular outrage, then tries to blame Sen. Dodd for the mess (counting on useful idiots in the media and right-wing blogs) then Obama gets "outraged" yesterday, and now in Washington there is much weeping and gnashing of the teeth as Americans go hunting for their pitchforks and torches. All for $165 million, a pittance compared to the vast sums spent so far trying to repair our damaged economy. Well done fellas. Well done. 

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