I'm as outraged as everyone else over the AIG executives' undeserved bonuses, and I think they should voluntarily give them back.
I'm also not buying the story that Geithner didn't know about them until just before they were paid, and that Obama didn't know until a day later. They may not have known the specific details and amounts; but reports are now coming out that Geithner's aides were working with AIG on the compensaton plan even before he became Treasury Secretary and after. So the argument about not knowing seems to me to be in the wiggle-room category.
My guess is that, in their thinking, compensation that amounted to less than 0.1% of the total was not a deal-breaker and not worth fighting over, and they underestimated what a firestorm would result when they became the symbol of all that people resent about the different rules for the haves and the have-nots. And more and more of us feel we're slipping into the have-not category.
So now Obama is in a delicate position that challenges even his legendary balancing skills, specifically with the Geithner plan for dealing with toxic assets coming out today, and a House bill passsed and headed for the Senate that would tax these bonuses at 90%.
He definitely supports the Geithner plan, as does the financial world. But it is soundly opposed by the public and by some economists, most notably Paul Krugman.
It's time to bring in the adults, led by out adult-in-chief. And he's good at it. Let's see what he's able to accomplish tomorrow night in his major address to the nation on the economy. If he can do something comparable to what his Philadelphia speech on race did to defuse the Jeremiah Wright controversy, then we may make it through.
At this point, we have two crises: (1) the real economic disaster and (2) public sentiment. The latter, if allowed to run amuk and fueled by outrage, can make it impossible to deal rationally with the former. But neither can the outrage be dismissed. Obama has made a good start by acknowledging the outrage and, at the same time, reminding us that it is unwise to govern from a position of anger.
It's time for a dose of reality from an adult who inspires confidence and hope, who knows the wonky details, who has a plan that makes sense, and who can teach us in a way that we can understand.
It's a tall order. Nothing less is likely to pull us through.
Ralph
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Behind the scenes: word is out on that the battle between David Axelrod, arguing from his understanding of the public response, and David Geithner, arguing from his knowledge of how the financial world works, about the recovery plan and specifically about the bonuses.
ReplyDeleteAnd Geithner won. Arianna Huffington says that was a bad mistake, because now the public's outrage at AIG is likely to spill over to the Obama administration. And the Republican opportunists are piling on.
"Shameless opportunists like Mitch McConnell, Richard Shelby, and Eric Cantor, who have all argued against limiting executive pay and bonuses, are now positioning themselves in front of the populist parade, railing against AIG and pointing the finger at Obama for allowing this to happen on his watch."
I think Frank Rich may be right is defining this as Obama's Katrina moment.
Update: as of 03-23-09, 9 of the top 10 bonus recipients have given back the bonuses. In all, about half of the bonus money has been returned, so far.
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