Archive for the ‘Wall Street’ Category

Class Warfare? Obama Tears Down Rich Instead of Inspiring Others To Get Rich

March 28, 2009

Barack Obama wrote a book about hope and be came president promising it. So why’s he doing everything in his power to snuff it out?

Think about it: In Obama World, what are we supposed to “hope” for? Certainly not vast riches.

By Adam Brodsky
The New York Post

What would be the point? His budget swipes massive amounts of wealth from top earners.

Consider, too, his resentful rhetoric toward them. Recall his despicable failure to block the House from moving to rip up private contracts and confiscate past earnings via a 90 percent, retroactive tax.

Really, in this climate, who can muster enthusiasm for personal fortune-building?

“Bankers and executives on Wall Street need to realize . . . that the days of outsized rewards . . . have to be over,” Obama lectured Tuesday.

Yes, bankers and Wall Streeters hurt the economy. But most of their dubious activities occurred before government involvement, when their own fates (and their firms’) were still on the line. Wall Streeters couldn’t have intended to fleece taxpayers, because until last year no one imagined federal bailouts. Indeed, many risky loans were made at the behest of government — not in defiance of it.

No wonder people like AIG exec Jake DeSantis feel persecuted and betrayed. In his resignation letter, which ran in Wednesday’s New York Times, DeSantis describes how he and others like him (folks who, he says, had little to do with the shenanigans that ruined AIG) view the threatening demands to return their bonuses as broken promises, despite their “years of dedicated, honorable service.”

DeSantis doesn’t blame Obama, but the president has contributed to a culture in which such feelings of hopelessness among the well-off (and those who want to be) surely must be on the rise.

Consider Obama’s claim this week that the economy “only works if we recognize that we’re all in this together,” with “responsibilities to each other.” He seems to be saying the fruits of one’s labor must go to help others. Or that there’s no need to work hard; someone else will care for you. Gee, now that’s inspirational.

Anyway, he’s 180 degrees wrong: Capitalism works when folks compete with each other, when they take risks and try to score big — not when they let the other guy pay their way.

“Outsized rewards” motivate. They offer something to dream about.

In trying to strike gold, Wall Streeters made bets that channeled capital to where it was demanded, even if they wound up with snake eyes and dragged the nation down with them.

Obama talks about the national importance of personal financial motivation. Americans, he says, “can’t afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity.”

But he can’t have it both ways. And in his eyes, there’s just something amiss when some folks earn significantly more than others. “Twenty years ago,” he says, “if you went into investment banking, you were making 20 times what a teacher made. You weren’t making 200 times,” as some investment bankers do now. Yes, but what’s the problem?

Never mind that teachers, like those in New York, can now earn handsome six-figure salaries, with lifetime job-security and unmatched benefits. The question is, why shouldn’t folks on Wall Street hope to make big bucks — especially if they’re willing to take big gambles?

Obama says Wall Streeters “need to spend a little time outside of New York” — to see that folks in North Dakota, Iowa or Arakansas “would be thrilled to be making $75,000 a year.”

That’s backward: Wall Streeters shouldn’t go to Arkansas; Arkansans should come to New York — and see the grand opportunities that lie before them. That’s how you inspire hope.

Let’s face it: If youngsters can’t even fantasize about becoming the next Bill Gates or Warren Buffet, what “hope” is there for the American dream?

Not much — alas.

Welcome to Obama World.

What’s Behind the Geithner Debate?

March 27, 2009

If the United States was an aircrft, Obama has already touched every dial and lever in the cockpit.  And what does that mean?  Only one thing for sure: Uncertainty.  And a lack of confidence.  That’s why businesses are not yet rehiring and people are holding on to their money.  People are looking for more certainty and Geithner at Treasury isn’t offering that….

***********************

By Will Marshall
Real Clear Politics

Progressives, who have so far marched in rare lockstep behind President Obama, are falling out over Treasury Secretary Tim Geithner’s plan to get credit flowing again. At issue are conflicting visions of exactly what kind of economy should emerge on the other side of today’s crisis.

Pundits and columnists traffic in certitudes, but the rest of us can be forgiven for not knowing whether the Geithner plan will actually work. We’re in terra incognita here, and analogies to the Great Crash of 1929, or more recent banking crises in Japan and Sweden, may be of limited utility. Amid all the complexity and uncertainty, the debate over Geithner’s proposal is a kind of ideological ink-blot test.

Some liberal critics charge that it is nothing more than a continuation of the Bush-Paulson policy of propping up failed banks and financial institutions until the crisis somehow resolves itself. They question whether Geithner, a former governor of the New York Federal Reserve, is capable of administering sufficiently harsh medicine to his former peers in the realm of high finance. Many conservatives, relieved by the voters of primary responsibility for fixing the mess, are hoping to exploit populist anger over the massive wealth transfer from taxpayers to Wall Street.

The essence of Geithner’s plan is to reanimate the market for the securitized mortgages and other loans that no one wants to buy now. Until banks can take these toxic assets off their books, they won’t be able to resume lending. Geithner proposes to use what’s left of the TARP (Troubled Assets Relief Fund) money to entice private actors, such as hedge funds, to buy the assets.

Treasury Secretary Tim Geithner.  (AP Photo/Gerald Herbert)

The basic idea here is that these private money-managers will do a better job of pricing the assets than the government ever could. If the spoiled assets regain their value, these private buyers win–but so do taxpayers, who would no longer have to foot the whole bill for the failures of the past.

Conversely, if the assets do not regain their value, then everybody loses. Well, almost everybody. In order to persuade private buyers to take the plunge into the toxic pool, the Geithner plan insures them against downside risk.

Despite their admiration of Obama, many liberals are unhappy with this arrangement. They decry the plan as yet another subsidy to the very people whose reckless risk-taking in search of outsized profits got us into this mess. They complain that Geithner’s plan is, at best, a palliative that doesn’t address the underlying cause of seized-up credit markets — namely, the fact that major U.S. banks are, for all practical purposes, insolvent. Elizabeth Warren, a Harvard law professor who heads the panel Congress set up to oversee TARP, likens the Geithner plan to an IV drip for “zombie banks.”

Putting the big banks on life support, in this view, merely prolongs the agony and could lead to a long period of Japanese-style stagnation. Better to follow the sterner Swedish model: Nationalize insolvent banks, wipe out equity holders, and return a smaller number of healthy banks with clean balance sheets to private hands.

But nationalization could wind up costing taxpayers a fortune, while also causing collateral damage to the secondary market for securities backed by mortgages in other loans. Congress’ hot-headed reaction to the AIG bonus scandal did little to inspire confidence in the federal government’s ability to manage financial companies. Furthermore, Obama’s economic team seems willing to bet that bank assets are worth more than today’s depressed market prices suggest.

In short, Obama and Geithner are working to restore the financial sector as it existed roughly a decade ago….

Read the rest:
http://news.yahoo.com/s/realclearpolit
ics/20090326/cm_rcp/whats_behin
d_the_geithner_deba

Related:
http://michellemalkin.com/2009/03
/27/the-strange-sacking-of-a-to
p-treasury-official/

Roubini Says Stocks Will Drop as Banks Go ‘Belly Up’

March 26, 2009

The rise in the stock market shows promise, but we at Peace and Freedom are looking for businesses to re-hire workers and for consumer spending to rebound before we hire a band and celebrate economic recovery….

*******************

From Bloomberg

U.S. stocks will fall and the government will nationalize more banks as the economy contracts through the end of 2009, said Nouriel Roubini, the New York University professor who predicted last year’s economic crisis.

“The stock market is a bit ahead of the real macroeconomic and financial news,” Roubini, a professor at NYU’s Stern School of Business and the chairman of consulting firm Roubini Global Economics, said in an interview with Bloomberg Television in London today. “We’ll have some major banks going belly up that will need to be taken over.”

The global equity rebound in March that sent the Standard & Poor’s 500 Index to its best monthly advance in 17 years is a “bear-market rally” and U.S. Treasury yields will “remain relatively low” as investors flock to the safest assets, Roubini said. Treasury Secretary Timothy Geithner’s new plan to remove toxic debt from financial companies won’t be enough for insolvent banks, he said.

Roubini’s outlook contrasts with predictions this week from Templeton Asset Management Ltd.’s Mark Mobius and Traxis Partners LLC’s Barton Biggs, who said that equities are poised to rally as government efforts to revive the economy and banking system begin to work. Investors are “way too optimistic” about the prospects for a recovery in the economy and earnings, Roubini said.

Read the rest:
http://www.bloomberg.com/apps/news?pid=
20601087&sid=aCvWs8KIIsUo&refer=worldwide

President Tries To Harness Public Anger To Move His Budget

March 26, 2009

In attempting to harness public anger over the financial crisis on behalf of his budget, President Obama is confronting the politically uncomfortable fact that the success of his long-term agenda and Wall Street’s recovery are intertwined.

By Alec MacGillis and Scott Wilson
The Washington Post

That acknowledgment is reflected in the president’s shift in tone from his tempestuous town hall appearances in California last week to Tuesday evening’s more sober appraisal of who is responsible for the frozen credit markets, insolvent banks and burst real estate bubble.

He condemned Wall Street “Ponzi schemes, even when they’re legal, where a relatively few do spectacularly well while the middle class loses ground” during a March 18 town hall event in California’s Orange County, which is now closing elementary schools because of falling property tax revenue. Back inside the Beltway, the president said during his prime-time news conference that some of us “can’t afford to demonize every investor and entrepreneur who seeks to make a profit.”

In the balance as he attempts to walk this line is Obama’s long-term agenda, embodied in the budget he was selling on Capitol Hill yesterday and which a House panel passed on a party-line vote late last night. To build public support for his $3.6 trillion package of plans to reform health care, energy and education, Obama is attempting a kind of transference — persuading Americans that the excesses crystallized by bonuses for the AIG unit at the center of the financial collapse can only be fixed by the systemic overhaul of the economy represented by his budget.

Read the rest:
http://www.washingtonpost.com/w
p-dyn/content/article/2009/03/2
5/AR2009032503117.html?hpid=
topnews

Stocks manage moderate gain after erratic session: weak demand for toxic assets

March 25, 2009

The Geithner plan is now on the market….and the demand for “toxic assets” was weak on day one…

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Wall Street has managed a moderate gain after an attack of nerves had investors giving back a big early advance and then barreling back into the market right before the close.

Tim Paradis, AP Business Writer

Trading was extremely erratic — the Dow Jones industrials rose as much as 203 points in early trading in response to upbeat economic data, then fell nearly 110 during the afternoon before closing up 90. Analysts said weak demand during an auction of government debt stirred up worries about how easily Washington will be able to raise money to fund its economic rescue program. The fear in the market is that the government might not be able to easily raise the hundreds of billions of dollars it needs.

The day shows how fragile Wall Street remains despite a two-week rally that saw the Dow regain more than 1,000 points. The market was pulled in different by opposing forces Wednesday that led to choppy trading — which may well be the pattern for stocks going forward.

Read the rest:
http://finance.yahoo.com/news/St
ocks-manage-moderate-gain-apf-1
4746401.html

Related:
 Obama, Economy: So Much Uncertainty Spins Off More…. Uncertainty

Michelle Malkin:
http://michellemalkin.com/2009/0
3/25/wonderboy-strikes-again/

http://americanheartland.wordpress.c
om/2009/03/25/325-voices-from-t
he-heartland-a-business-perspective/

This Time: Obama Woos Wall Street For Support

March 24, 2009

The Obama administration, after months of criticizing Wall Street, has been scrambling to woo top bankers and financiers to back its latest bailout plan.

By MONICA LANGLEY
The Wall Street Journal

In recent days, in spite of public furor over huge bonuses paid at American International Group Inc., the administration has concluded that it needs the private sector to play a central role in fixing the economy. So over the weekend, the White House worked to tone down its Wall Street bashing and to win support from top bankers for the bailout plan announced Monday, which will rely on public-private investments to soak up toxic assets.

But weeks of searing criticism by politicians and the public had left bankers leery of working with the government. After brainstorming about what to do about that problem, the White House resolved to try to take control of the debate, according to several administration officials. In weekend television appearances, President Barack Obama and other administration officials tempered their criticisms of the financial sector.

Read the rest:
http://online.wsj.com/article/SB1
23785266231219605.html

Obama Talks Too Much: Time to Fire Toxic Tim Geithner

March 22, 2009

Step up, Barack!

People are angry; protesting at the homes of AIG executives.  Congress is eager to act and acting: offering to tax bonuses at 90%.  That’s anger and action: maybe not the kind we need but action nonetheless.

 Did ACORN Organize Protests At Homes of AIG Execs?

But what do we have from the “Boy Wonder” Treasury Secretary?  Old ideas on how to handle toxic assets repackaged by the government and for sale.

But this will take another $1 trillion of taxpayers’ money.

Paul Krugman puts down the Geithner plan in stark terms: it’s not new or inventive and won’t work.

Obama, Geithner Toxic Asset Plan is Old Hash That Won’t Work

And Geithner knew about the AIG bonuses way back: he even worked to preserve them.

See: Wall Street Journal:
Geithner Aides Worked With AIG for Months on Bonuses

Yet President Barack Obama talks too much.  An appearance with Leno was no help to him and last night on “60 Minutes” he was asked if he was “punch drunk.”  And he has a speech scheduled on TV for Tuesday night.

(Some guys are just not gifted at the unscripted, Barack.  Ask Joe Biden.)

And we already know what the president has to say:

He’s outraged, he’s confident, Geithner is a good guy, and his budget spending on the environment, health care, energy, education and the rest will ultimately drag the economy out of this hole and balance the budget.

Bull.

Geithner: AIG must return bonus money

Presidents have been wrong before.  The good presidents admit it.

Forget that budget, at least for a week.  Everyone is focused on AIG and Wall Street and eager for action — not more spending.

Sen. Gregg says Obama budget will bankrupt US

Fix the banks, get lending going, and even if you take Geithner’s toxic assets plan don’t take back “Toxic Tim.”

What President Barack Obama needs to do is something foreign to a community organizer, teacher, and professional elected official: he has to take action; shut up and act.

He’s got to restore confidence: as he has said himself.

He’s got to fire Geithner who is in bed with the Wall Street types he cannot fire.

That means he may have to fire Larry Summers too: because he is also in bed with Wall Street and is Geithner’s mentor in chief.

Geithner is expendable: a guy that has helped Wall Street (according to the left) and a guy that wants to throw around even more money (according to the right).  Plus he is widely seen as weak and has a TV and public appearance persona of a worm.

Larger view
Treasury Secretary Timothy Geithner. (Photo by MANDEL NGAN/AFP/Getty Images)

Some have called all this an “incestuous relationship” …. the Geithner-Wall Street-Summers-politics stew.

Geithner and Summers have no clue what people are going through in the real world: and they have worked so far to protect the likes of Bernie Madoff, Wall Street and the AIG world.

By not realizing the public outrage with the AIG caper; Summers cost the president confidence in his inner economic circle.

The ensuing congressional outrage has probably lessened confidence in AIG forever: which will make it harder to sell off the bad parts and the good parts.  AIG made a lot of mistakes but now “we” the nation have destroyed their brand name forever in the bargain.  And the bonuses were protected in the stimulus and geithner made sure they were paid….

And other companies took money after causing economic ruin and will survive unharmed.

Seem fair?  Is this the new America?  No courts required: just hearings and a trial on TV…..

Saturday, protesters went to the rich AIG executives homes to raise awareness and express outrage  – a kind of witch hunt enters your neighborhood.  This is bad business, bad politics, and bad for law and order.

Meanwhile Vice President Joe Biden made fun of Toxic Tim Geithner even while the president is saying he loves the guy.

“Tim Geithner is always there when you need to borrow money. And no questions asked,” Biden said in what was supposed to be a joke.

Biden: Give Obama a F*&^%$#ing Break

Christina Romer, head of the White House Council of Economic Advisers, said on “Fox News Sunday,” “Geithner is doing an excellent job.”

Wanna bet?  Nobody believes that.  Geithner’s poll numbers are bad and if he continues in his job it will be Barack Obama’s poll numbers that suffer….even more.

I can predict the headline: Geithner Blow-back On Obama.

Obama “Strongly Approve” Number from 42% to 36% in Last 60 Days; Geithner 24% Or Less

This is like watching a freshman throw up out the window and it all winds up on the prom queen.

Christina Romer
Romer.  Clueless?

This is the Special Olympics White House.

It isn’t even certain anymore that Helicopter Ben Bernanke knows what he is doing.  By injecting even more money into the economy, he is risking inflation and gold is already up and the dollar already down.

People are angry and demanding action.  Obama should give them action.  Like a Roman emperor: now is the time for a very public thumbs down in the Colosseum of the national media.

File:Colosseum in Rome, Italy - April 2007.jpg

Forget the venue.  Forget the words.  Forget the host: I mean even Leno couldn’t save the president from himself, much as he tried.

“60 Minutes,” Leno, campaigning,  basketball, and a speech from the White House will no longer do.

Americans are no longer hungry to see their president talk, wise crack or fill out his brackets.

Act.

Throw Geithner to the lions.

Then develop a real plan of recovery.  Fix the toxic asset problem and get lending going.  It’s late but it’s never too late for this.

Recovery first, then budget.  It is “the economy stupid.”  The “recovery, stupid.”

We are in a culture war and an economic war at the same time.  Geithner offers good news to either side in either war.

He’s  toxic.  And not an asset.

*********************

Visit Michelle Malkin:
http://michellemalkin.com/2009/03/23/
the-david-copperfield-school-of-econ
omic-recovery-pt-ii/

Geithner’s Toxic Asset, Bank Plan Offers Nothing New To A Bad Idea

 Shelby: Geithner Needs “180 Degree Change” To Stay At Treasury

Resistance grows to Obama’s bigger government

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WASHINGTON (AP) – Amid the continuing backlash over AIG bonuses, President Barack Obama is defending his embattled treasury secretary and touting his ambitious $3.6 trillion budget proposal as a boon for ordinary Americans.

And, as early as Monday, the administration is expected to roll out a plan to rid banks of their toxic assets and speed the flow of loans. Some industry officials familiar with the details said they expected the approach would try to remove as much as $1 trillion from banks’ books.

Obama used his weekly radio and Internet address to turn the focus back to his budget proposal, calling it “a firm foundation of investments in energy, education and health care that will lead to a real and lasting prosperity.” He plans a network television interview airing Sunday and a prime-time news conference Tuesday to continue bolstering his case.

The disclosure that American International Group Inc. paid out $165 million in bonuses to employees, including to traders in the financial unit that nearly collapsed the insurer, has dominated the news this week. It has left the Obama administration on the defensive and seeking to refocus attention.

In the interview with CBS’ “60 Minutes,” Obama made clear he was standing behind beleaguered Treasury Secretary Timothy Geithner, who was roundly criticized over the bonus flap and steps to revive the economy.

Obama said that if Geithner offered his resignation, the answer would be, “Sorry buddy, you’ve still got the job.” CBS released excerpts Saturday.

Read the rest:
http://news.yahoo.com/s/ap/200
90322/ap_on_go_pr_wh/obama_economy

From CNN:
http://edition.cnn.com/2009/BUSI
NESS/03/21/global.economy/index.html

Related:
Obama Overexposed
(Talking too much…)

Threat of inflation sky high

Obama’s Katrina Moment Is Here Now

Obama Administration May Not Understand Economy

 Public Outrage Could Devour Obama Presidency

Financial Advice, Recovery, Trumped by Obama, Congress, Media, Polls
(Maybe Axelrod is giving better advice than Summers, Geithner…)

Protesters At Homes Of AIG Execs
.
Obama, Biden Chat Up Economy; Congress Talking “Stimulus II”

Rosy Talk From Obama and Gang is BS

 Biden Off Mic: “Gimme a f*&$#ing break”

From India, wondering why Obama is on Leno:
http://gvk2.wordpress.com/2009/03/
22/obama-at-jay-leno-show/

http://mcauleysworld.wordpress.com/2
009/03/20/aig-bonuses-who-knew-wha
t-when-geitnerobama-dishonesty/

.
http://winteryknight.wordpress.com/20
09/03/22/cbo-budget-adds-48-trill
ion-to-national-debt-china-worried/

Visit Hot Air:
http://hotair.com/archives/2009/03
/22/the-geithner-plan-still-a-contrad
ictory-bag-of-slogans/

In this photo provided by CBS News-60 Minutes, Steve Kroft of ...
Too little too late?  In this photo provided by CBS News-60 Minutes, Steve Kroft of 60 Minutes interviews U.S. President Obama at the Oval Office on Friday, March 20, 2009 in Washington. In an interview with CBS television’s ’60 Minutes,’ Obama said that if Treasury Secretary Timothy Geithner offered his resignation, the answer would be, ‘Sorry buddy, you’ve still got the job.’ (AP Photo/CBS News-60 Minutes, Aaron Tomlinson)

Public Outrage Could Devour Obama Presidency

March 22, 2009

The president is getting what he asked for, but perhaps not what he had in mind. During the campaign, Barack Obama beckoned Americans to put aside their cynicism about politics and re-engage as active citizens. They are now doing so with red-hot anger. They are outraged by events and forcing their way into congressional affairs and behind closed doors where policy wonks discuss issues with cerebral civility. The president is now trapped between these two realms — the governing elites who decide things and the people who are governed. Which side is he on? If he does not choose wisely, the anger could devour his presidency.

By William Greider
The Washington Post

The immediate impetus is the latest outrage from the financial sector. AIG, the failed insurance giant on government life support, proceeded to hand out $165 million in employee bonuses. Because Washington has pumped $170 billion into this zombie corporation, people quickly grasped that AIG was redistributing their tax money. On March 13, the White House sent out Larry Summers, the president’s economic adviser, to explain things. Government has no choice, Summers said, because this is a government of laws and we must honor contracts. On Monday, the president scrapped that line, hoping to dodge the outrage.

Something fundamental has been altered in American politics. Encouraged by Obama’s message of hope, agitated by darkening economic prospects, many people have thrown off sullen passivity and are trying to reclaim their role as citizens. This disturbs the routines of Washington but has great potential for restoring a functioning democracy. Timely intervention by the people could save the country from some truly bad ideas now circulating in Washington and on Wall Street. Ideas that could lead to the creation of a corporate state, legitimized by government and financed by everyone else. Once people understand the concept, expect a lot more outrage.

Read the rest:
http://www.washingtonpost.com/wp-dyn/conte
nt/article/2009/03/19/AR2009031902511.ht
ml?hpid=opinionsbox1

Read the rest:
Financial Advice, Recovery, Trumped by Obama, Congress, Media, Polls

Protesters At Homes Of AIG Execs

Wall Street Journal: “Geithner Incapacitated;” President Voices Support

Government To Have Bigger Role in All American Lives; Obama Seeks to Increase Oversight of Executive Pay

Dodd Caper, House Vote on 90% Tax, Highlights Founders Hopes; Modern Reality

Obama, Pelosi: Anything to Win

March 19, 2009

Barack Obama and Nancy Pelosi are all about changing America: and not necessarily the old fashioned way with public debate, wise congressional deliberation, laws and courts.

This is now about anything to win.

President Obama’s “outrage” at AIG paying bonuses is theater of the absurd.  He could care less about $165 million.  He sits atop a several trillion dollar empire in real trouble.  What he wants is to demonize Wall Street, “Big Business” and the leadership of the “old” capitalisim, just as he demonized “big oil.”

By rushing his economic stimulus through congress, and in the confusion making sure bonus money for corporations like AIG was protected, the White House, Treasury and perhaps even the Fed engineered the AIG outrage  in order to overhaul regulations governing American business.

You’ll never convince me otherwise and you’ll never convince me that Chris Dodd or Tim Geithner has the brains or the stones to do this on their own.  Obama and Rahm Emanuel certainly might….

Now the president will go on Jay Leno: the first sitting president to appear on the “Tonight Show” — more blatant blurring of news and entertainment and from whom?  Barack Obama and the National Barack Channel (NBC).

More do anything to win.  We expect him to host SNL soon — to diffuse their comedic cynicism.

And then we have Nancy Pelosi, the third in line to the presidency, virtually telling illegal immigrants to violate the law: that the law is “Un-American.”

Well, here’s more “anything to win” — changing law by illegal acts and shenanigans.

If Nancy wants to make good law; she is in the catbird seat to do so.  The Speaker of the House knows how to make good law and how to defeat those that stand in her way too….

Pelosi made the stimulus bill and Obama has already offered her the health care revolution.  But she’s not satisfied yet: now she’ll rewrite immigration law by not picking up a pen: she’ll use the microphone.

*****************

Related:
Pelosi Urges Illegal Immigrants to Ignore The Law?
http://www.foxnews.com/politics/2009/03/1
8/pelosi-tells-illegal-immigrants-work-site-rai
ds-american/

 Obama, Congress, Treasury, Fed: Shameful Mismanagement of Your Money, Recovery

Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?

 
This man wanted to run the census and now will supervize the writing of a measure to federalize schools. Incoming White House Chief of Staff Rahm Emanuel gestures prior to the inauguration ceremony of Barack Obama as the 44th President of the United States, in Washington, January 20, 2009.(Jim Young – UNITED STATES/Reuters)

Did Obama White House Fuel AIG Bonus Mess To Enact Tougher Rules With Public Support, “Outrage”?

March 18, 2009

Despie President Obama’s many anti-big business, anti-executive and anti-Wall Street pronouncements, he never could gain much traction with the public and the congress until just this week.

That, and the view that we should “Never let a good crisis go to waste” makes one wonder why the AIG bonus crisis was left unreported until just now?

And Obama’s faux outrage at AIG reminded me of the movie “Casablanca” when Captain Renault said, “I’m shocked, shocked to find that gambling is going on in here!”

Why do we have our national panties in a bunch over less then $200 million while we are spending trillions?

The answer could be that this is the crisis, the tool, the White House was waiting for to open the door to tougher standards on pay, bonuses, aircraft and other perks for an army of top executives….

This may be about government intrusion into corporate life in America much more than it is about AIG and Geithner.

But Geithner is a friend of Wall Street and Summers is a friend of both and Obama hired them both…..

Obama: Why Are We Saving Geithner and His Incestuous Relationship With Wall Street?

I mean, the president is offering in his budget to intrude upon every other corner of American life — why not the captains of Wall Street?

You don’t think the term “Big Oil” was an accident, do you?

“This is a manipulation of the media and the public, simple as that,” a long time political operative told us.  “Don’t underestimate these guys.”

Treasury Secretary Timothy F. Geithner, left, President Obama and Vice President Joseph R. Biden Jr. in the Oval Office. Rahm Emanuel is just outside the camera’s view.  Photo: Stephen Crowley/The New York Times

From The New York Times, January 29, 2009:
“Obama Outraged, Calls Wall Street Bonuses ‘Shameful'”
http://www.nytimes.com/2009/01/30/
business/30obama.html

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By JULIE HIRSCHFELD DAVIS, Associated Press

Cue the outrage. 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.

Neither Obama nor Geithner learned of the impending bonus payments until last week, senior administration officials told The Associated Press late Tuesday, speaking on condition of anonymity about internal discussions.

Publicly, the White House expressed confidence in Geithner — but still made it clear he was the one responsible for how the matter was handled.

“I do know that Secretary Geithner last week engaged with the CEO of AIG to communicate what we thought were outrageous and unacceptable bonuses,” White House spokesman Robert Gibbs said. Gibbs declined to provide a timeline that would show when members of the administration — including the president and others at the White House — became aware of the bonuses.

In an interview with The Associated Press, Obama’s chief economic adviser Lawrence Summers said: “In the context of what we’re doing, Secretary Geithner was notified, he has said, last week. As he reported to the rest of us, he moved aggressively and immediately, aggressively and immediately, to recoup whatever could be legally recouped. He recognized that you can’t just abrogate contracts willy-nilly, but he moved to do what could be done.”

The bonus problem wasn’t new, as many lawmakers and administration officials knew only too well. AIG’s plans to pay hundreds of millions of dollars were publicized last fall, when Congress started asking questions about expensive junkets the company had sponsored. A November SEC filing by the company details more than $469 million in “retention payments” to keep prized employees.

Back then, Rep. Elijah E. Cummings, D-Md., began pumping Liddy for information on the bonuses and pressing him to scale them back. “There was outrage brewing already,” Cummings said. “I’m saying (to Liddy), ‘Be a good citizen. … Do something about this.’ ”

Around the same time, outside lawyers hired by the Federal Reserve started reviewing the bonuses as part of a broader look at retention and compensation plans, according to government officials who spoke on condition of anonymity. The outside attorneys examined the possibility of making changes to the company plans — scaling them back, delaying them or rescinding them. They ultimately concluded that even if AIG’s bonuses were withheld, the company would probably be sued successfully by its employees and be forced to pay them, the officials said.

In January, Reps. Joseph E. Crowley of New York and Paul E. Kanjorski of Pennsylvania wrote to the Federal Reserve and the Treasury Department pressing the administration to scrutinize AIG’s bonus plans and take steps against excessive payments.

Read the rest:
http://news.yahoo.com/s/ap/2009031
8/ap_on_go_pr_wh/aig_what_di
d_they_know

http://michellemalkin.com/2009/0
3/18/the-kabuki-theater-of-aig-outrage/

Obama: Fire Geithner

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 AIG Bonus Flap: Lawsuit to Get Back $165 M Could Cost $300 M or More

Obama White House Issues “Lamest” Confidence Statement Ever for Geithner

Amid AIG Furor, Dodd Tries to Undo Bonus Protections He and Geithner Put In

 Biden Off Mic: “Gimme a f*&$#ing break”

AIG Bonus Flap: Lawsuit to Get Back $165 M Could Cost $300 M or More

 Obama Dead Wrong On Stimulus, Caterpillar Company Jobs, Recovery

Obama, His Outrage in Legal, Political Quicksand Over AIG Bonuses?
.
Obama Wants To “Unclog Blocked Lending Arteries” — Here’s The Problem

 Finance, one of America’s great industries, being destroyed by Congress during crisis?

 Bankers Press Case Against Punitive Tax

 President, Treasury, Congress “undermining efforts to shore up the economy”

AIG Bonuses: Pure Distraction
http://axisofright.com/2009/0
3/18/aig-bonus-outrage-is-a-distraction/

http://porcupinerim.wordpres
s.com/2009/03/21/obama-spokesman/