March 16, 2009

3/16: Everybody Hates AIG

Liberal bloggers are outraged that AIG -- which has received over $170B in taxpayer bailout money -- is handing out $165M in bonuses "to executives in the same business unit that brought the company to the brink of collapse last year." Lefty bloggers are not at all persuaded by AIG CEO Edward Liddy's claim that the company was contractually obligated to pay these bonuses; as Robert Reich points out: "Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid."

That said, liberal bloggers aren't merely criticizing AIG; they're also blasting Pres. Obama's economic team (and Treasury Sec. Timothy Geithner in particular) for failing to exert more pressure on the financial companies receiving taxpayer dollars. The netroots are complaining that "the corporate bailouts have become a complete political disaster" and are criticizing the Obama's administration's "impotence". Josh Marshall writes:

"I don't believe the bonuses themselves are the heart of the matter [...] What's really driving this forward -- and what makes it such a dangerous moment for the White House -- is the jarring image of the administration's impotence. Secretary Geithner found out about the bonuses. He told AIG CEO Edward Liddy it wouldn't fly. And Liddy, in a curiously imperial letter, tells Geithner that much as he is pained by the situation -- to blow it out his ass. Which he apparently proceeded to do. There's really no other way to describe it."

What else is happening in the blogosphere?

• Conservative bloggers (Hinderaker, Reynolds, Bandow) are accusing Obama of flip-flopping after WH CEA Chair Christina Romer said that the fundamentals of the economy are "sound."
• Conservative bloggers (Morrissey, Liebau, Driscoll) are arguing that Russia is "testing" Obama after a Russian air force chief speculated about "bas[ing] some strategic bombers in Cuba or on an island offered by Venezuela."
• Liberal bloggers (Lewison, Benen, Yglesias) are blasting ex-VP Dick Cheney after he criticized Obama during an interview with CNN's John King. Other lefty bloggers (Sudbay, Heilbrunn, Llorens) are encouraging Cheney to keep making TV appearances, since they think that he hurts the GOP.

AIG: Shameless

Liberal bloggers are outraged that AIG -- which has received over $170B in taxpayer bailout money -- is handing out $165M in bonuses "to executives in the same business unit that brought the company to the brink of collapse last year":

• The Washington Monthly's Steve Benen: "And here I thought AIG couldn't possibly do anything to anger Americans even more. I stand corrected."
• Think Progress' Matthew Yglesias: "You would think that executives at a company that's so poorly managed that it requires vast government aid wouldn't be getting big bonuses but apparently not."
• Atrios: "Remember that part about the US owning AIG? Well, you know, we just gave them a bunch of money and they get to do with it whatever they want. Heckuva job, Timmeh. This money is going to the clowns who sunk the company, and almost the world."
• AMERICAblog's Joe Sudbay: "It's just phenomenal how tone deaf a lot of these business people are. We thought George Bush lived in a bubble. Apparently, the leaders of corporate America were in there with him...and together, they almost destroyed the economy of the U.S. -- and the world."
• Obsidian Wings' hilzoy: "If you want to get really angry, consider that [AIG's Financial Products division], whose members will be getting nearly half a billion dollars in bonuses for the remainder of 2008 and 2009, has about 370 employees. That's well over a million dollars a person, to a group that lost over $40 billion (so far!), and bankrupted its parent company. Nice work if you can get it."
• TPM's Josh Marshall: "[B]eggars can't be choosers. It's really too rich for AIG to continually come back to the government asking for billions of dollars and tell us it's tough luck when we ask for revisions that should be no brainers. The folks running AIG's financial products division should be happy to escape this mess without criminal indictments. And that's not hyperbole. When you look at what they were doing, foolish or high-risk behavior are inadequate descriptors. It really amounts to fraud."

Liberal bloggers aren't persuaded by the CEO's claim that AIG was contractually obligated to pay these huge bonuses:

• Firedoglake's looseheadprop: "I don't believe this crap about outside lawyers saying they are obligated to pay [the bonsuses]. If AIG did not pay the bonuses and the employees sued -- tell me, where in the world would you find a jury that would vote in favor of the plaintiffs?"
• The Huffington Post's Robert Reich: "AIG's arguments are absurd on their face. Had AIG gone into chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid; indeed, AIG's executives would have long ago been on the street."
• Marshall: "Now, as a narrow legal matter, I don't doubt there is a contractual obligation. But bankruptcy disrupts contractual obligations. I'm actually not sure where employees with contractual bonuses come in line in a bankruptcy proceeding. But I bet it's really far toward the end of the line. [...] So on the business merits, they're bankrupt. But we decide it's in the national interest to prevent formal bankruptcy. And these sharks -- not everyone at AIG, but the execs that created this mess -- use that as a lever to get paid the money they never would have seen if we'd let (market) nature take its course."

Marshall also passes along a quip from a TPM reader: "Have [AL Sen.] Richard Shelby and [TN Sen.] Bob Corker held their press event demanding that AIG break their contracts with their overpaid Financial Products workers for their shoddy work?"

AIG II: Could Geithner Be Any Weaker?

Liberal bloggers are fed up with Obama's economics team:

• MyDD's Todd Beeton: "The administration's impotence in the face of AIG's outrageous bonus announcement is disappointing to say the least."
• MyDD's Jerome Armstrong: "Between Timothy Geithner and [WH adviser] Lawrence Summers, its hard to imagine Obama's economic leadership being any worse. We really need for the Democratic congress to take away the economic agenda from these two. The corporate bailouts have become a complete political disaster."
• Oliver Willis: "On Meet The Press, White House Council Of Economic Advisers Chairperson Christina Romer said that Sec. Tim Geithner is 'urging' AIG on the bonus issue. We -- the American people -- own 80% of the company. We're past the point of 'urging'. We need to TELL those bastards what to do."
• MyDD's desmoinesdem: "I just hope Obama will wake up and realize he needs to ditch Summers and Geithner before they do any more damage to his presidency."
• Reich: "When taxpayers have put up, and essentially own, a large portion of their assets, AIG and other behemoths should be accountable to taxpayers. When our very own Secretary of the Treasury cannot make stick his decision that AIG's bonuses should not be paid, only one conclusion can be drawn: AIG is accountable to no one. Our democracy is seriously broken."

AMERICAblog's Chris in Paris uses sarcasm to ridicule Geithner: "It's hard to understand how so many people believe Geithner is in deep over his head and not up for the job. Sure, he sat on his hands and did nothing for years while working at the NY Fed, but can't they see that he kindly asked AIG to scale back bonuses after they rolled out yet another round just to kick sand in the face of the American public? I hear he asked very sternly and insisted they would all be very naughty if they ran over him again."

Meanwhile, Marshall explains why he thinks this story is so significant: "I think [this] may prove to be a turning point, both for AIG and the government. I don't believe the bonuses themselves are the heart of the matter, nor the fact that they're going to the very executives who caused AIG's implosion or even the galling reality that, since all money is fungible, they're being paid with taxpayer dollars. What's really driving this forward -- and what makes it such a dangerous moment for the White House -- is the jarring image of the administration's impotence. Secretary Geithner found out about the bonuses. He told AIG CEO Edward Liddy it wouldn't fly. And Liddy, in a curiously imperial letter, tells Geithner that much as he is pained by the situation -- to blow it out his ass. Which he apparently proceeded to do. There's really no other way to describe it."

Michelle Malkin is one of the few conservative bloggers who's as outraged about the AIG bonuses as are liberal bloggers: "Here's a blood-boiler of the morning. Mr. Lonely Tim Geithner -- who was instrumental in putting together the wealth-redistributing AIG 'rescue' plan -- now apparently believes that if he says 'pretty please with sugar on top,' the bailout behemoth will cut back on bonuses sure to deepen the disgust of outraged American taxpayers."

OBAMA: Wait -- Now The Fundamentals Are Strong?

Conservative bloggers are mocking Obama after his WH CEA Chair, Christina Romer, echoed AZ Sen. John McCain's famous pronouncement from last year's Presidential campaign and said that the fundamentals of the economy are sound:

• Power Line's John Hinderaker: "Do you think Obama will apologize to McCain for his conduct during the campaign? No, I don't think so either."
• Glenn Reynolds: "Amazing. And amusing! But hey, if the economy is still fundamentally sound, I guess Obama's claims of inheriting the problems don't hold water..."
• AmSpec Blog's Doug Bandow: "As Matthew Vadum points out, after trashing the economy in order to win passage of billions or trillions or who knows how much in 'stimulus' spending, the Obama administration has decided that the economy is doing pretty well, thank you very much. There may still be a couple little glitches here and there, but, with the Chinese inquiring about the security of their U.S. securities, the Prez and his buddies say they are focusing on the economy's sound fundamentals. Right. Catherine Favazza posts a delightful youtube look at what candidate Obama said when Sen. John McCain proclaimed that the economy was fundamentally sound. Strange, there seems to be a little inconsistency. Imagine that..."

OBAMA II: The Russians Are Coming!

Conservative bloggers are declaring that Russia is "testing" Obama after a Russian air force chief said that the country "could base some strategic bombers in Cuba or on an island offered by Venezuela":

• Hot Air's Ed Morrissey: "It took John Kennedy more than a year to precipitate a military standoff with the Soviet Union over Cuba in the 1962 missile crisis. It's taken the Obama Amateur Hour less than two months."
• Townhall's Carol Platt Liebau: "Testing of our new and inexperienced Commander-in-Chief continues as Russia weighs creating military bases in Venezuala and Cuba. The problem, of course, is that if President Obama allows Russia really to gain a foothold in the western hemisphere (in violation of the Monroe Doctrine), it becomes incredibly difficult for his successor to do anything about it."
• Ed Driscoll: "Every four to eight years, Democrats go back to the future, hoping for the latest reissue of a sleek, classic 1960 model. This year, for your ducking and covering pleasure, he comes complete with an update of the Cuban Missile Crisis."

CHENEY: Go Back To Your Cave...Dick

Not surprisingly, liberal bloggers did not take kindly to Cheney's attack on Pres. Obama on CNN:

• Daily Kos' Jed Lewison: "What a complete asshole. It's time for this royal Dick to get his ass back into an undisclosed location."
• Firedoglake's Christy Hardin Smith: "Why won't he just go away?"
• Benen: "There are, oddly enough, still some people who find Dick Cheney credible, and believe his voice is worth listening to. I don't know why."
• Yglesias: "If I were Dick Cheney, I'd be laying low thanking my lucky stars that I'm not on trial for war crimes not going on television to talk smack about the new administration. But talking smack it is. It's really remarkable when you think about it that anyone would listen to Cheney on the subject of national security. His administration was by far the least successful in American history in terms of preventing international terrorists from murdering Americans. Also by far the least successful in American history in terms of preventing international terrorists from murdering NATO allies. And the military action his administration pursued in response to the terrorist attack we suffered under their watch has come to be mired in problems, teetering on the brink of failure, almost entirely thanks to a second -- but completely unnecessary -- war his administration chose to undertake in favor of successfully completing the first one."

Other liberal bloggers don't mind that Cheney is making TV appearances, as they think that his continued media presence hurts the GOP:

• Sudbay: "[I]t's probably good for Obama to have Cheney attack him. Cheney and George Bush are responsible for the massive financial mess Obama inherited. Having Cheney out there talking -- and putting his face in front of the American people again -- just reminds us of that."
• The Huffington Post's Jacob Heilbrunn: "Forget Rush Limbaugh. This is far better. President Obama should thank his stars every time Cheney emerges from whatever hidden lair he's now lurking in to growl about how Bush did everything right. Who could ask for a better reminder of the ineptitude, incompetence, and iniquities of the Bush era?"
• TalkLeft's Big Tent Democrat: "[A]s the de facto leader of the worst Administration in history, Cheney is not someone whose views should be taken seriously. I certainly will not. I will point out that it is political suicide for the Republican Party to allow Cheney to reemerge as the face of the GOP."

THOUGHT OF THE DAY: Whose Side Are You On, Moderates?

Yglesias offers another of his patented smackdowns of Senate moderates:

"When I read stories about Democrats signing letters urging the leadership not to pass cap & trade through budget reconciliation, or whining that Clinton-era tax rates will wreck the economy, or preemptively caving on permit auction, then it's hard to escape the conclusion that it's not the administration doing something wrong; [it's] that the key members of congress just fundamentally agree with George W. Bush and [Senate Min. Leader] Mitch McConnell that it doesn't matter if people die of treatable illness or if the planet ceases to support human life. It's not, after all, as if any great mystery over how you move legislation that you think is important. Fifty is a smaller number than 60, and it's easier to get smaller numbers of votes that bigger ones. If these guys have some genius alternative plan of preventing atmospheric carbon from reaching deadly levels, I'm all ears -- but if they're convincing then, again, I would want that plan to pass with a minimum of procedural hurdles. But it seems to me they don't have any such plan, they just want to keep letting our problems get worse and worse indefinitely, but they don't have the guts to admit it."

LEST WE FORGET: In New Terror Video, AIG Demands Huge Ransom From U.S.

The Huffington Post's Andy Borowitz:

"American intelligence experts are analyzing a new terror video from the American International Group (AIG) in which the leader of the shadowy organization demands billions of dollars from the United States. In the four-minute tape, which surfaced over the weekend and caused deep concern among U.S. officials, a man believed to be the chairman of AIG says that if his organization is not paid its ransom, 'chaos and destruction will rain down on the American economy.' [...]

Intelligence analysts said that the man, AIG chairman Edward M. Liddy, appears to be speaking at a luxury beach resort that offers few clues as to his exact location, although there is 'good intelligence' pointing to the Ritz Carlton in the Cayman Islands. [...]

Reacting to the video, Homeland Security Secretary Janet Napolitano raised the nation's terror alert level to orange, meaning 'taxpayers are about to get reamed again.'

Treasury Secretary Timothy Geithner also released a response to AIG's latest demands, but intelligence experts said they would need several weeks to decipher Mr. Geithner's response."

Posted by Ian Faerstein at March 16, 2009 01:30 PM