President Barack Obama has proclaimed that the bonuses to AIG executives is “outrageous” but the “The buck stops with me.” The White House press corp again failed to ask the obvious question: what does that mean? When everyone is at fault, no one is generally accountable in the bizarre world that is Washington.
Previously, Obama has insisted in answering questions about investigating war crimes by the prior administration that “no one is above the law” and has thus far blocked any investigation into the matter. In the meantime, the Edward Liddy, chairman and CEO of the American International Group Inc. is expressing his own outrage. Everyone is outraged. Congress, AIG, and the White House. With everyone outraged, no one is really responsible in the perfect Beltway sidestep. Obviously, Obama does not believe he is at fault since he has insisted that he didn’t know of the bonuses and says that he is opposed to them. What the “buck” statement tends to mean by politicians is not “I accept responsibility” but “I expect blame for everyone else so no need to keep demanding answers.”
I discussed this issue on Countdown in this segment. Senator Chris Dodd has been criticized for allowing an amendment that exempted such bonuses but others have pointed out that Dodd opposed the idea that was pushed by the Obama White House. That takes a bit away from the outrage expressed by President Obama and his staff this week.
While Congress might be able to recoup the funds with restrictions on future payments to AIG, it believe an effort to tax the individual AIG executives would raise serious constitutional problems. This remains a case of the completely corrupt meeting the overtly incompetent. It will be the taxpayers who pay for that perfect storm.
In the meantime, Libby is asking AIG executives to voluntarily return half of their bonuses — leaving many with half a million dollars or more for ruining the company as opposed to a million.
As for the executives, they appear to have act within the law written by Congress. As rational actors, why wouldn’t they grab a million dollars or more? It is not likely that these people will have gainful employment in the future. Being a former AIG executive is much like being a former Madoff accountant — not exactly a hot item in the job market. It is not like this will make these executive more unpopular. They are currently rivaling Ebola and rickets on popularity scales.
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35 thoughts on “When Everyone is at Fault, No One is Accountable: Barack Obama Takes Blame for AIG Bonuses”
What Mr. Obama has gotten us into and what he must do to help get us out. This is an excellent mini-summary of that duo Summers-Geithner who helped get us into this mess years ago and who are now charged by Obama to help get us out of a financial crisis.
Summers-Geithner are, in my opinion like:
Tweedle-dee Dum and Tweedle-dee Dee I fear further damage by thee for the US economy…
Obama’s Make-or-Break Summer
By FRANK RICH
Published: June 20, 2009
…the administration’s two financial gurus, Lawrence Summers and Timothy Geithner, wrote to preview their plan. “Some people will say that this is not the time to debate the future of financial regulation, that this debate should wait until the crisis is fully behind us,” they wrote by way of congratulating themselves on taking charge.
Who exactly are these “some people” who want to delay debate on the future of regulation? Not anyone you or I know. Most Americans were desperate for action and wondered why it was taking so long. The only people who Summers and Geithner could possibly be talking about are the bankers in their cohort who helped usher us into this disaster in the first place. Both men are protégés of one of them, Robert Rubin, the former wise man of Citigroup.
There are some worthwhile protections in the Summers-Geithner legislation, especially for consumers, but there’s little that will disturb these unnamed “people” too much. I’ll leave it to financial analysts to detail why the small-bore tinkering in the administration blueprint won’t prevent another perfect storm of arcane derivatives, unchecked (and risk-rewarding) executive compensation and too-big-to-fail banks like Citi. Suffice it to say that the Obama team has not resuscitated the Glass-Steagall Act, the New Deal reform that Summers helped dismantle in the Clinton years and that would have prevented the creation of banking behemoths that held the economy hostage.
Thanks for the concern. I am up for a virtual party!
“Remember, people, these are not bonuses but “retention payments”, and these talented people who helped drive the company into the ground are simply too vital to let go of just so that they can go and work some place else.
Heaven forbid we should let them go and do for our competition what they just did for our company!”
With performances like those that these ‘vital employees’ turned in, one would think that AIG would be paying them bonuses specifically to go work for the competition.
“Put this where the sun doesn’t shine.”
Where might that be? Bush’s brain, perchance.
Good to hear. You were missed. Buddha and I were organizing the search party, and Patty C was stocking provisions for the trip. Bob,Esq. was handling the justification of the categorical imperative for the caper. Now we’ll just have to throw a virtual party.
I have been around, but I haven’t posted as often as I would like. I hope to correct that in the near future.
It is interesting how the Republicans hypocrisy is glossed over by the MSM. I guess we will have to keep pointing it out on this site.
“Senator Richard Shelby, the top Republican on the Senate Banking Committee, told CBS news that: “It should be up to the board of directors of a private corporation to set the compensation of an executive; it shouldn’t be Congress’s role.”
Senator Mel Martinez told CNBC that: “While it is very appealing to think about executive compensation as being a part of this, one of the drawbacks to that is perhaps that we would have fewer entities participate in what is essentially a voluntary act.”
And. House Minority Whip Eric Cantor, “outraged” over AIG’s issuance of $165 million in bonuses, said he was not in favor of “the federal government be[ing] able to set salaries across the board,” when the issue of executive compensation arose in September 2008.”
“On ABC’s “Good Morning America” today, Sen. Richard Shelby said Congress must do everything it can to make sure the government money going to AIG is handled appropriately.”
“A senior GOP aide familiar with ongoing discussions tells me that two freshman Republicans — at the direction of Eric Cantor and other House GOP leaders — will introduce a bill to “direct” Treasury to recoup the bonuses. The two Republicans are Rep. Paulsen of Minnesota and Rep. Lance of New Jersey.”
The MSM continues to ignore the Bush disaster years when Republicans were for AIG bonuses but now have a new found convenient story over outrage at these very same bonuses under a new administration intended or not.
Congress continues to play politics…taxpayers continue to get screwed.
Where’ve you been?
I am tempted to ask Jennifer if her repetition proves her a pervert or a ghoul, but I like to consider myself a gentleman of sorts and will avoid that indulgence.
Nice response, as usual, to the latest Von Troll family member.
“There are too many perks given to one company to just be a mistake. AIG is connected, it’s a big contributor, and it’s getting its reward. The treatment of AIG goes right to the top.”
It’s worth remembering that the AIG bailout was not some Congressional bailout plan. It started out well before that in Sept. 2008 when Bush’s Secretary of the Treasury, Henry Paulson, and Mr. Bernanke decide to loan the insurance/financial services giant 85 billion dollars of Federal Reserve funds under a law passed in 1932 that did not require Congressional approval. The loan was presented to Congress as a fait accompli by the Bushies, and resulted in the government acquiring a 79.9% interest in the Company by virtue of equity participation notes.
Mindless repetition of the same idea is a classic sign of repetition compulsion. Here’s Dr. Freud on the subject:
“In his late work, Freud emphasized the destructiveness of the repetition compulsion. In “New Introductory Lectures to Psychoanalysis” (1933a ), he wrote, ‘And now the instincts we believe in divide themselves into two groups—the erotic instincts, which seek to combine more and more living substance into ever greater unities, and the death instincts, which oppose this effort and lead what is living back into an inorganic state. From the concurrent and opposing action of these two proceed the phenomena of life which are brought to an end by death.’ Repetition compulsion thus became synonymous with destructive impulses.”
I will echo what everyone else has said about your summation. It was disturbing to listen to Liddy today. He sounds very believable but he is selling some serious snake oil.
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