March 18, 2009

3/18: The Debate Over Dodd

Yesterday, a ton of blog posts were written about Sen. Chris Dodd's (D-CT) alleged role in allowing AIG to hand out multimillion-dollar bonuses. FOXBusiness' Rich Edson and ABC News' Jonathan Karl both wrote articles alleging that Dodd attached an amendment to the stimulus bill which restricted executive compensation but contained an "exception for contractually obligated bonuses agreed on before Feb. 11, 2009" (Dodd denies writing this exemption clause). Edson's article was picked up by Matt Drudge and various conservative bloggers, who proceeded to mock Dodd. Jim Geraghty wrote: "Senator Chris Dodd's challenger, Rob Simmons, was just given a golden, golden issue to run on. Who in their right mind would codify in law that bonus payments to executives at bailed-out companies could not be prohibited?"

Liberal bloggers, on the other hand, are defending Dodd and pointing to Marc Ambinder's article explaining that the exemption clause was added by the conference committee, not Dodd. In the eyes of most lefty bloggers, officials in Pres. Obama's administration are responsible for watering down Dodd's restrictions on executive pay, since they openly opposed Dodd's amendment back in February. Consequently, the netroots are stepping up their criticism of Treasury Sec. Tim Geithner, whom they consider responsible for this AIG bonus fiasco.

What else is happening in the blogosphere?

• Conservative bloggers (Reynolds, Riehl, Bandes, Hinderaker) continue to argue that controversy over the AIG bonuses is a distraction from the larger issue, which is the bailouts themselves.
• Liberal bloggers (Singer, McIntyre) are buzzing about a new Gallup poll indicating that 53% of Americans support "a new law that would make it easier for labor unions to organize workers," but others are pointing out that the question doesn't specifically ask about the Employee Free Choice Act.

DODD: The Rightroots Pile On, But Do They Have The Wrong Guy?

Yesterday, Edson and Karl both wrote articles alleging that Dodd attached an amendment to the stimulus bill which restricted executive compensation but provided an "exception for contractually obligated bonuses agreed on before Feb. 11, 2009." Edson's article (whose initial title, "Amid AIG Furor, Dodd Tries to Undo Bonus Protections He Put In," has since been amended) was picked up by Drudge and various conservative bloggers, who proceeded to mock Dodd:

• Michelle Malkin: "Chris Dodd: For AIG bonuses before he was against them."
• RedState's Erick Erickson: "[W]ill federal prosecutors indict Chris Dodd? Dodd sneaked in a provision to protect AIG bonuses. Congress, via Dodd's last minute amendment, specifically granted AIG permission to give the bonuses."
• NRO's Geraghty: "Senator Chris Dodd's challenger, Rob Simmons, was just given a golden, golden issue to run on. Who in their right mind would codify in law that bonus payments to executives at bailed-out companies could not be prohibited?"
• Commentary's Jennifer Rubin: "[G]ood old Chris Dodd gave AIG a little help via a legislative goody to 'protect' certain bonuses from government meddling."
• NRO's David Freddoso: "[Dodd], who has received more than $100,000 from AIG employees in the last 20 years, had written and inserted the relevant provision, with the relevant loophole. How can he, the president, or anyone else who voted for the stimulus, suddenly act surprised? Don't tell us they didn't read the bill."
• Rep. Michelle Bachmann (R-MN): "It turns out that Chris Dodd, Chairman of the Senate Banking Committee and the largest single recipient of campaign contributions from AIG, has found himself embroiled in the recent AIG bonus scandal and is quickly trying to reverse course, in both his policies and rhetoric. First, Dodd inserted language into last month's 'stimulus' package that specifically prohibits the government from stopping the taxpayer-funded $165 million in executive bonuses at AIG to happen. Now that there is a political firestorm rising over these very bonuses, he is calling for a 91% excise tax on those bonuses."

DODD II: He's Innocent, I Tell Ya!

Media Matters and Ambinder published articles disputing the notion that Dodd deliberately created a loophole that allowed AIG to hand out these bonuses. As Ambinder explains (in an article that Dodd himself is promoting), the loophole was added by the conference committee, not Dodd:

"[O]n the subject of AIG's bonuses, [Dodd] doesn't deserve the bad rap. [...] The truth is that the codicil was added in conference by mutual agreement of House and Senate Democrats and the White House. At the time, the administration worried about both the perception and the reality of government's interfering in the decisions and internal operations of the banks. Backstopping employment contracts was controversial to critics, but to an administration that was trying to work with the banks, it was an easy call. The worry was that the banks would suffer immediate and disasterous brain drain if the govenment could abrogate (the world of the week!) employment contracts willy-nilly. Apparently, no one at the Treasury Department or the New York Federal Reserve Board bothered to check on what those contracts actually contained -- therein was the sin of omission, if you can call it that."

Liberal bloggers are now accusing the Obama admin. of trying to throw Dodd under the bus, noting that they were the ones who opposed Dodd's efforts to limit executive pay:

• Salon's Glenn Greenwald: "There is a major push underway -- engineered by Obama's Treasury officials, enabled by a mindless media, and amplified by the right-wing press -- to blame Chris Dodd for the AIG bonus payments. That would be perfectly fine if it were true. But it's completely false, and the scheme to heap the blame on him for the AIG bonus payments is based on demonstrable falsehoods. [...] It was Obama officials, not Dodd, who demanded that already-vested bonus payments be exempted."
• Open Left's Chris Bowers: "Back in mid-February during the fight over the stimulus package, Senator Chris Dodd was pushing for retroactive restrictions on bonuses paid to employees of financial companies receiving bailout money. This measure, which would have applied to AIG bonuses, was opposed by both Wall Street and the Obama administration. [...] Both [WH economics adviser] Larry Summers and Tim Geithner personally asked Senator Dodd to remove the retroactive provision, because they thought it meant banks would give the government its money back. [...] While Dodd refused to back down, at the request of the administration the retroactive language was stripped from the final bill during the conference report anyway. Now, a source deep inside the Obama administration is telling the press that the bonuses are Dodd's fault, and that Geithner is the one who is outraged."
• MyDD's Todd Beeton: "Chris Dodd's amendment limiting executive compensation, particularly bonuses on a retroactive basis[,] passed the Senate but then got severely watered down in conference. The more you read, the more it's clear that Geithner's and Summers' fingerprints are all over this. [...] The fact is, despite what the right wing noise machine tells you, it wasn't because of Dodd that the limitations on executive pay and bonuses in the stimulus package weren't retroactive (and thus applicable to AIG) it was in spite of him."
• Firedoglake's Jane Hamsher: "Dodd's provision was weakened when the bill got to conference. According to those knowledgeable about what happened, it was due to pressure brought to bear by the Treasury out of concern that those with contracts that guaranteed them bonuses would litigate. [...] It's impossible to know how many of those bonuses would have been covered by Dodd's original language without examining the individual contracts. What is certain, however, is that the loophole regarding 'retroactivity' which facilitated the payout of the bonuses that AIG cited in their white paper, was something that Treasury specifically lobbied for. For the 'administration official' to blame Dodd in the pages of the New York Times for the payout of these bonuses, after the White House publicly fought him tooth and nail to weaken compensation limits, is completely disingenuous."
• dday: "The President brought this upon himself through his hirings. But if he wants to find a way out, he could stop the practice of his team blaming others and start living up to his own rhetoric."

GEITHNER: Fire His Ass, Mr. President!

Liberal bloggers are stepping up their criticism of Geithner:

• Atrios: "Which senator will be the first to ask [Geithner] to resign?"
• Bowers: "If Geithner knew about the bonuses for months, and was working on trying to stop them, why didn't he tell the public? Knowledge of these bonuses would have reduced support for the releasing of the second $350 billion in TARP funds, and also increased support for the TARP Reform Act that passed the House but was not acted upon in the Senate. Burying this info played a huge role in the January passage of TARP that included no additional legal restrictions on the money. But Geithner sat on the story. [...] He sat on information that could have swung one of the three most important congressional votes of the last two years. That is unacceptable. Fire Geithner."
• Beeton: "It seems President Obama may have a...bad choice before him: save the jobs of those complicit in this fiasco, i.e. Geithner and Summers, or risk his first term's agenda. Actually, it shouldn't be a difficult choice."
• Hamsher: "Geithner seems to share [Andrew Sorkin's] assumption, namely that there is nothing wrong with this system that piles of money won't fix. That if you keep shoveling cash into it, some day things will get better. He has not addressed the crisis of public trust, the critical lack of faith that everyone -- both inside and out of the financial industry -- is gripped with right now. He wants to pay the very bankers who created this mess in order to buy up 'toxic assets,' which the public views as just another way for him to funnel billions to his Wall Street pals. As if the systemic problems that led to this crisis will just go away and the same thing won't happen all over again. People are outraged at the injustice of paying out billions in bonuses to AIG bankers, but they're also irate (and freaked out) about what it says about those in charge -- that they are so much a part of the fabric of the problem that they're incapable of seeing what it is, much less solving it."

AIG: Let's Not Forget The Big Picture

As we noted yesterday, conservative bloggers aren't joining their liberal counterparts in decrying the AIG bonuses. Instead, they're portraying the bonus hubbub as a distraction from the larger issue, which is the bailouts themselves:

• Glenn Reynolds: "[T]he whole bonus issue is kind of a distraction."
• Dan Riehl: "What this entire fiasco documents is how bad an idea it is when the government gets its hands around elements of the private sector. They invariably screw it up."
• Townhall's Jillian Bandes: "I'm not thrilled about millions going to executives who don't deserve it. But in light of AIG's legal obligations, and in light of the bailout being such a gigantic fraud to begin with, worrying about the bonuses seems like a very expedient distraction."
• Power Line's John Hinderaker: "I'm not sure whether there is actually anything wrong with the AIG bonuses or not; if the facts are as described by the Washington Post, this may be a standard employee compensation issue, not an executive greed-fest. The real lesson is that the federal government has no business trying to run an insurance company. When the manner in which AIG pays its employees becomes a political food-fight, something is seriously wrong."
• RedState's Francis Cianfrocca: "Even though there is a principled case to be made in favor of the bonuses, principle is something Obama has never known or cared anything about."

That said, Reynolds is pleased that the AIG bonus backlash appears to be hurting Dems: "They rushed this stinker through, and now it's biting them on the ass. Good."

EMPLOYEE FREE CHOICE ACT: Does The Public Support It?

Liberal bloggers are buzzing about a new Gallup poll which found that 53% of Americans support "a new law that would make it easier for labor unions to organize workers":

• MyDD's Jonathan Singer: "So much for the notion that the Employee Free Choice Act (EFCA) is toxic, or even unpopular. [...A]t the least these data should indicate to those wavering on the legislation that they would stand to gain from coming out on the side of workers, even if it might slow down the flow of large contributions to their campaign accounts."
• Daily Kos' Jake McIntyre: "The timing of this news couldn't be better, as it should help stiffen the spines of Congress to move quickly to pass Employee Free Choice -- as written -- and get it to President Obama's desk for signing."

However, FiveThirtyEight's Nate Silver cautions EFCA proponents not to take too much comfort in this poll, since the wording of Gallup's question is vague: "Let's be careful here, however: that Americans support an easier path toward unionization in the abstract does not mean that they support any and all potential mechanisms toward achieving that goal. They might plausibly think that EFCA is the wrong means toward the right end."

Ezra Klein takes a more optimistic view: "[T]he question avoids a lot of the complexity in the debate but it does make clear the goal of the legislation; in my view, despite skipping over the controversy, your answer to the question of whether or not it should be easier or harder to organize unions more or less determines your response to EFCA."

Meanwhile, Silver offers EFCA proponents some advice on how to frame the issue: "While a certain amount of anti-corporate populism can probably be productive in this environment, I don't know that the unions fundamentally want to make this a narrative about class conflict. [...] Polling has generally revealed that more Americans support the right to union formation than would want to form a union themselves. The more effective framing, rather, might be in normative rather than economic terms. That is, don't focus on the benefits of unionization, but rather on the right to union formation. For example: the ability to form a union is a fundamental American right, companies are routinely infringing upon that right, and EFCA is necessary to protect that right. This would also provide for a stronger rebuttal to the 'secret ballot' talking point ('EFCA would deprive employees of their right to a secret ballot'), which is oriented precisely along these lines."

THOUGHT OF THE DAY: Why Do You Need 60 When 50 Is Enough?

Yglesias defends the proposed Dem strategy of using the "budget reconciliation" process to pass Obama's health care and cap-and-trade plans with 51 votes instead of 60:

"[T]he idea that passing legislation my majority rule is some kind of mafia stunt is absurd. This is how bills pass in the House of Representatives, in the parliaments of the United Kingdom and Canada, in the state legislatures of the vast majority of American states. It's how student council worked in my high school. It's how New Hampshire town councils make decisions. You're not talking about 'running over' the minority, you're talking about taking a vote in which the majority wins and the minority loses. That's how we pick Senators! [NH Sen.] Judd Gregg doesn't need 60 percent of the vote to stay in office."

LEST WE FORGET: Policeman Breaks Up Area Party Out Of Pity

From The Onion:

"SOUTH BEND, IN -- While patrolling the University of Notre Dame campus Friday night, officer Robert Mueller disrupted a party taking place at 131 Frances St. out of sheer pity for its attendees. 'At approximately 10:30 p.m., I observed two minors awkwardly drinking beers on the porch outside their home,' Mueller wrote in his report of the pathetic infraction. 'After approaching the suspects, I immediately scanned the area for rowdy or disorderly conduct, the smell of marijuana smoke, or any signs of possible fun and, finding none, decided to take decisive action. That party was a goddamn embarrassment.' Although Mueller felt so sorry for the partygoers that he couldn't bring himself to contact their parents, the relieved college sophomores said they would never forget the crazy night when their Numb3rs viewing party was busted up by the cops."

Posted by Ian Faerstein at March 18, 2009 01:20 PM