Wednesday, March 18, 2009

More Outrage: Obama Administration Knew About the Bonuses Months Ago

In addition to blocking legislation that would have prevented AIG's bonus payments, the Obama administration actually knew about the pending bonuses months ago from SEC filings and letters from lawmakers demanding action. Great.

Here is the latest, courtesy of the Associated Press (via Yahoo News):
For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off government bailouts. It wasn't until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back.

Why the sudden furor, just weeks after Barack Obama's team paid out $30 billion in additional aid to the company? So far, the administration has been unable to match its actions to Obama's tough rhetoric on executive compensation. And Congress has been unable or unwilling to restrict bonuses for bailout recipients, despite some lawmakers' repeated efforts to do so.

The situation has the White House and Treasury Secretary Timothy Geithner on the defensive. The administration was caught off guard Tuesday trying to explain why Geithner had waited until last Wednesday to call AIG chief executive Edward M. Liddy and demand that the bonus payments be restructured.

Publicly, the White House expressed confidence in Geithner — but still made it clear he was the one responsible for how the matter was handled.
Is Geithner going under the bus? For the record, I think that AIG is not "guilty" of anything -- except for spending money that the government gave it. The government's decision to hand the company a blank check is more blameworthy.

See also:

Misdirected Outrage: Public Should Bash the Feds for Giving AIG a "Blank Check"

Sincere or False Outrage? The Obama Administration Smacks Down AIG


Pro said...

OMG! Breaking News, Resignations imminent!

dualdiagnosis said...


"..prompting White House officials to assert President Obama’s continued confidence in Mr. Geithner."
“He more than has the president’s complete confidence,” said Rahm Emanuel, the White House chief of staff. As angry as the president is at the news about A.I.G., which he learned Thursday, Mr. Emanuel said, “his main priority is getting the financial system stabilized, and he believes this is a big distraction in that effort.”...


David Axelrod, senior adviser to the president, dismissed such talk, citing the financial mess that Mr. Geithner had inherited. “He has been confronted with a situation and challenges that are unparalleled in modern history, and to put it all on his shoulders is not fair and not right,” Mr. Axelrod said. “He’s a brilliant and committed guy with a great deal of experience in this area, and we’re standing with him.”

Also today-

"I have complete confidence in Tim Geithner and my entire economic team," Obama said. "Nobody's working harder than this guy. You know, he is making all the right moves in terms of playing a bad hand."

My prediction? Geithner's gone within 60 days.

That's just how Obama rolls.

commoncents said...

Great post!

We're covering this as well on COMMON CENTS...

Darren Lenard Hutchinson said...

Thanks for the link, Common Cents.

DD - I am not sure if that will happen, but he is taking a lot of heat. Perhaps Obama is trying to shift it away from Geithner. I hear that Obama said "the buck stops with me."

Anonymous said...

Too bad we couldn't have a leader ready on day one. *cough* Hillary *cough*. Will our country ever recover from having two incompetent presidents in a row?

Nell said...

Referring to Geithner, Obama said. "Nobody's working harder than this guy."

To Obama, no doubt this statement rings true, since Obama himself doesn't know the meaning of hard work. He has assumed the presidency during the worst crisis since the Great Depression and yet he has spent every weekend at Camp David and throws a cocktail party for his Hollywood pals once a week.

Do the words "work through the weekend" mean anything to him?

Off topic, but having observed Obama's complete lack of social skills and his utter cluelessness, I've come to the conclusion that he falls somewhere on the autism spectrum.

Valtin said...

Great coverage, Darren. I've put in my two cents at my blog, as well. I see things similarly to you, but I think there's still more to this AIG/bailout story, in general. If nothing else, it's a textbook case of capitalist perfidy.

AIG Scandal: America Wakes Up To Extent of Capitalist Thievery

In particular, I think it's worth noting the connections between AIG and the intelligence agencies, something rarely mentioned.

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