Yesterday, Senate Banking committee Chairman Christopher Dodd took responsibility for inserting language into the federal stimulus bill that protected bonuses like the controversial AIG bonuses. A Treasury official has acknowledged that the Obama Administration pushed for the language. On Tuesday, Dodd denied have any role in inserting the language.
I have been criticized (e.g., here and here) for referring on Countdown in this segment to the amendment protecting bonuses and saying “And I believe it was Dodd who inserted it.” While Treasury may have suggested it and pushed it, it was Dodd who agreed to insert it. Nevertheless, Dodd has stressed that it was the Obama administration that pressured him to add the amendment, which he did not want.
Now, Dodd has come out and acknowledged that indeed he was the member who put it into the bill.
This was a change from the day before when Dodd denied any role in adding the language. The record now also contradicts the earlier statements of the White House, which expressed no knowledge of the bonuses and outrage over the very notion of using stimulus funds in this way.
The new spin from members is that they had no choice but to protect past bonuses. That is not true in my view. I believe that language could have been crafted to keep these funds from being used as general revenue in this fashion or for the purposes of bonuses. Members simply did not want to spend sufficient time to draft the law properly and wanted to rush to get out hundreds of billions of dollars. Now, these same members who expressed concern over litigation are attempting to do something far more controversial — imposing a retroactive confiscatory tax.
For the full story, click here.
http://jonathanturley.org/2009/03/20/jackpot-jimmy-and-other-aig-executives-named-some-seek-compensation-for-security/#comment-44352
Patty C 1, March 20, 2009 at 12:11 pm
‘Too many cooks in the kitchen spoil the broth.’
When the Feds take over a failed bank they bring in there own people. There is no question who is in charge, even though the existing employees are kept on for the day-to-days.
‘Meeting of the minds’ – still a crucial element in contract law -last time I checked.
Buddha:
I like rebumpkinlins (coined by someone on this site), although rethuglicans is a close second.
Jill, et. al:
In my opinion the who shot john is not important. the overall idea of giving congress the power to determine corporate policy is the issue. whether Timmy G or Larry S goes is immaterial, that would be like taking out an appendix when the colon has cancer (to use a Buddhaism). The particulars of this dont matter the broader philosophical debate of limited government is at issue. Do we want a country controlled by the government or do we want a government controlled by the country?
Here’s Paul Krugman’s take: (from his blog)
“Preliminary thoughts on the tax bill:
1. It’s not the way you should make policy — it’s clumsy, and it will punish some innocent parties while letting the most guilty off scot-free
2. But — there wasn’t much alternative at this point. And for that I blame the Obama people.
I’ll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it’s part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.
This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.”
I must agree that Timmie and Summers must go. I am interested in this PPIP that Jill provided us. I think it is time to let the Hedge people follow their hedge to bankruptcy. I am tired of paying for their gambling. When you gamble you have to be ready to lose.
This story is worth reading:
“The Obama Administration is putting the finishing touches on another big bank bailout. Called the Public Private Investor Partnership (PPIP), it is the brainchild of the Treasury Secretary from Wall Street, Tim Geithner. Under the plan, the government will give our money to hedge fund managers to buy “toxic” assets for more than they are worth. The banks that created these toxic turkeys will use the money from the sales to recapitalize themselves. Everyone comes out ahead except, of course, the taxpayers, who are essentially funneling money to hedge funds to buy bad assets for more than they are worth. The other bonus for the banks in this plan, as Yves Smith points out, is that they get to avoid giving the toxic assets any real market value. Less transparency and more transfers of wealth from taxpayers to hedge fund managers…
But the truth is, the bonuses to greedy execs are just a sideshow. It’s the government’s willingness to give away hundreds of billions of dollars in yet another massive bailout that people should be shouting about.”
http://www.commondreams.org/view/2009/03/19-13
This story is worth reading:
“The Obama Administration is putting the finishing touches on another big bank bailout. Called the Public Private Investor Partnership (PPIP), it is the brainchild of the Treasury Secretary from Wall Street, Tim Geithner. Under the plan, the government will give our money to hedge fund managers to buy “toxic” assets for more than they are worth. The banks that created these toxic turkeys will use the money from the sales to recapitalize themselves. Everyone comes out ahead except, of course, the taxpayers, who are essentially funneling money to hedge funds to buy bad assets for more than they are worth. The other bonus for the banks in this plan, as Yves Smith points out, is that they get to avoid giving the toxic assets any real market value. Less transparency and more transfers of wealth from taxpayers to hedge fund managers…
But the truth is, the bonuses to greedy execs are just a sideshow. It’s the government’s willingness to give away hundreds of billions of dollars in yet another massive bailout that people should be shouting about.”
http://www.commondreams.org/view/2009/03/19-13
Sorry Buddha, I missed that post and I apologize!
rcampbell,
Glenn Greenwald has some interesting information which contradicts the story AIG is now laying out. It may be worth reading. I truly with they’d go after AIG under FRAUD because: 1. that is legal unlike the tax plan and 2. it allows for a great deal of info to be garnered. I’m guessing this is one reason why Congress is not choosing to explore the fraud option too vigourously. But if we put pressure on them, maybe that will change.
http://www.salon.com/opinion/greenwald/
P.S. If I missed this story earlier in the thread I’m apologizing in advance.
Sorry, Jill! I beat you to that one. 😀
This is an important update:
“In an interview with CNN’s Ali Velshi Thursday, Treasury Secretary Timothy Geithner confirmed that his department had pushed Sen. Chris Dodd to add a loophole in the federal stimulus bill allowing bailout recipients to receive bonuses. Dodd had told the network Wednesday that he had been the one to insert the loophole, but at the request of the Treasury.” I’m certain that we will find out Obama knew of this as well. It’s never just a lone colonel in the basement of the WH.
http://www.huffingtonpost.com/2009/03/19/geithner-treasury-pushed_n_177016
Right, hebegebe.
Then we can go back to those thieving, murderous reTHUGlicans.
The tennis game for the idiot American public.
Baaaa
Good news here is that this will be 1 term president (if you can call him that) and a 1 term dem congress.
Drunken bum, along with the drunk driver kennedy. Should be in jail not in the senate
lol
Who would have thought Robert Stack could do funny?