In Which Congress Pretends It Closed the Barn Door
Leaders of the White House economic team and the Senate’s top Republican bellowed about bonuses at a bailed-out insurance giant and pledged to prevent such payments in the future.
From one Sunday talk show to the next, they tore into the contracts that American International Group asserted had to be honored, to the tune of about $165 million and payable to executives by Sunday — part of a larger total payout reportedly valued at $450 million. The company has benefited from more than $170 billion in a federal rescue.
AIG has agreed to Obama administration requests to restrain future payments. Treasury Secretary Timothy Geithner pressed the president’s case with AIG’s chairman, Edward Liddy, last week.
“He stepped in and berated them, got them to reduce the bonuses following every legal means he has to do this,” said Austan Goolsbee, staff director of President Barack Obama’s Economic Recovery Advisory Board.
“I don’t know why they would follow a policy that’s really not sensible, is obviously going to ignite the ire of millions of people, and we’ve done exactly what we can do to prevent this kind of thing from happening again,” Goolsbee said.
Added Lawrence Summers, Obama’s top economic adviser: “The easy thing would be to just say … off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system.”
Summers said Geithner used all his power, “both legal and moral, to reduce the level of these bonus payments.”
Chorus of outrage over millions in AIG bonuses, yahoo news
And people think pot heads have no short term memory? You get the feeling congress is pulling bongloads like the stuff was legal!
This brings me to barney Frank, one of the architects of the bailout, and who knows better than anyone that there was nothing legislated to mandate how the bailout money was to be spent (compared to, for example, the strict mandates the auto industry has to meet). This was confirmed to me 20 minutes ago by a staff member at his office: there were no mandates, no benchmarks to meet, no legislation spelling out appropriate and inappropriate use of OUR MONEY. Nothing: the republicans and democrats, in a moment of bipartisan beauty, voted to simply fork over piles of cash to Goldman Sachs, Bank of America, Northern Rock, and countless others.
Today, Barney Frank everyone who voted for the bailout is hoping that grandstanding and sternly worded letters will fool his their constituents into forgetting exactly who it was that passed a bill that essentially gave away $700 billion dollars to the banks that caused all of our problems to begin with.
