3/19: More AIG Fallout

Sen. Chris Dodd (D-CT) continues to receive a lot of attention in the political blogosphere regarding his role in allowing AIG to hand out multimillion-dollar bonuses. On Tuesday, Dodd denied that he had inserted a clause in his executive compensation amendment which exempted bonuses that had been agreed upon before Feb. '09. Yesterday, however, Dodd admitted that he had been involved in drafting the exemption clause, although he emphasized that he only did it "reluctantly" because Treasury Dept. officials "were insistent." Conservative bloggers are calling Dodd a liar and declaring that he's "toast" in his 2010 reelection bid. Liberal bloggers, on the other hand, aren't upset by the fact that Dodd changed his story; they think that the real issue here is the fact that Treasury Dept. officials pressured Dodd into inserting the exemption clause. The netroots are tired of what they perceive to be Treasury Sec. Tim Geithner's unwillingness to demand more from financial firms receiving bailout funds, and they're calling on Pres. Obama to replace him. One blogger warns: "[Obama] can either stay with [Geithner] or cut his losses now and find a grown up who is more focused on helping the country as a whole instead of remaining friends with Wall Street."

Meanwhile, there appears to be a split between GOP congressmen and grassroots conservatives with regard to the AIG bonuses. While GOP congressmen are ratcheting up the populist rhetoric and trying to compel the Treasury Dept. to "recoup or stay the payment of AIG bonuses," conservative bloggers are defending AIG's right to fulfill its contractual obligations to its employees. Conservative bloggers are harshly criticizing the Dem proposal to tax AIG bonuses, calling it "patently unconstitutional" and "very bad for American capitalism".

What else is happening in the blogosphere?

• Liberal bloggers (Lewison, Dayden, Bok) are urging the DoJ to investigate AIG, as they see evidence for criminal activity in various divisions of the company
• Liberal bloggers (Drum, Yglesias, Benen, Coates) are not happy about Sen. Evan Bayh's (D-IN) new moderate caucus. Conservative bloggers, on the other hand, are pleased that Bayh's group "want[s] to put some speed limits on Obama's agenda."

DODD: Liar, Liar, Pants On Fire

On Tuesday, Dodd denied that he had inserted the exemption clause and "insisted he [didn't] know how it got there." Yesterday, however, Dodd admitted that he had been involved in drafting the clause, although he emphasized that he only did it "reluctantly" because Treasury Dept. officials "were insistent." Conservative bloggers are accusing Dodd of lying:

• NRO's Jim Geraghty: "Dodd admits initial lie on bonus amendment; increasingly resembles toast."
• Hot Air's Ed Morrissey: "Dodd lied. He spent a full day lying to the American people, and now he's trying to shift blame to others. He and his pal Barney Frank want to publicly name the people who received the bonuses authorized by Congress and this administration in an attempt to deflect blame for their own actions. If Dodd had a shred of honor, he'd resign. If he had a shred of honor, though, we wouldn't be in this mess."
• Michelle Malkin: "[U]nscrupulous borrower and No. 1 AIG benefactor Chris Dodd admits that yes, yes, he did support AIG bonus protections before he was against them. [...] Chris Dodd: Lying crapweasel, bailout lackey, winner of Kabuki Theater of AIG outrage lifetime achievement award."
• Power Line's John Hinderaker: "In a bizarre turn of events, Chris Dodd has walked away from the claim he made just yesterday that he had no idea how the provision affirming AIG's bonuses was inserted into the 'stimulus' bill at the conference committee stage. [...I]t appears that he lied yesterday to protect himself as well as the Obama administration, and then told the truth today because someone in the Treasury Department had already explained what happened. To say that the Democrats are in disarray would be an understatement."

DODD II: Blame The Obama Administration, Not Dodd

Liberal bloggers weren't upset by the fact that Dodd changed his story; they think that the real issue here is the fact that Treasury Dept. officials pressured Dodd into inserting the exemption clause:

• Salon's Glenn Greenwald: "The point was -- and is -- that Dodd was pressured to put that carve-out in at the insistence of Treasury officials (whose opposition meant that Dodd's two choices were the limited compensation restriction favored by Geithner/Summers or no compensation limits at all), and Dodd did so only after arguing in public against it. To blame Dodd for provisions that the White House demanded is dishonest in the extreme..."
• digby: "The media, for reasons I don't quite understand, still seem to think they've caught Chris Dodd lying about something. As dday pointed out last night, we knew that high officials in the Obama administration were lobbying for the carve-out provision be put into the conference report and Dodd confirming that is simply not news. For some reason, all day today, the media seemed convinced that there was some mystery surrounding this event and were passing on dark suspicions that this happened because Dodd took AIG money (as did a whole bunch of other politicians) when that clearly wasn't the motive. It was all very confusing. [...] Dodd did not indict the administration in his comments today. He didn't name any names and he said that he didn't think AIG was on the radar at all at the time. He was being a good soldier, as he was when he agreed to the changes thinking he was compromising. But at some point he may have to name names since somebody in Washington is determined that he take the fall for these bonuses and the press is on the hunt to prove that the Obama administration has been lying about when they knew about it."
• Open Left's Chris Bowers: "This scandal is the direct outcome of Geithner's bailout plan. Because the Obama administration is pursuing a public-private partnership bailout strategy, and because Wall Street wouldn't participate in this plan if their bonuses were threatened, the Obama administration blocked legislation that would have blocked Wall Street bonuses. They really should have pursued temporary nationalization instead."

Conservative blogger Stephen Spruiell agrees with his liberal counterparts: "Did Dodd lie to CNN? Maybe. Or maybe he just didn't understand the question. Look, it's hard to have any sympathy for Dodd -- the sweetheart mortgage deals, the Irish cottage, the self-righteous grandstanding, etc. And as for the policy at hand, I agree more with Geithner and [WH economics adviser Larry] Summers than Dodd. But as for the politics, this AIG thing is blowing up in Obama's face, and it looks an awful lot like his administration is trying to make Dodd the fall guy. I'm not so sure Republicans (or conservatives) should help."

AIG: Are The Rightroots Going Populist? Doesn't Look Like It...

Conservative bloggers are criticizing the Dem proposal to "levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money":

• NRO's Mark Steyn: "If you think the economy's bad now, wait till the world gets the message that American business is subject to retrospective bills of attainder and (as is also being proposed re the property market) that the legally binding terms of contract between independent parties can be modified by a judge. A land without the law of contract is a banana republic."
• Malkin: "Beware the awful precedent this after-the-fact 90 percent tax grab will set. Remember that last month, Barney Frank was already flexing his grubby paws over executive compensation. [...] First, they came for AIG bonuses. Next?"
• Hinderaker: "So an employee is promised a bonus if he stays on and works another year in what would otherwise be a dead-end job; in reliance on that offer, he stays and works for a year. Now Congress wants the bonus back. It's hard to understand how that comports with anyone's idea of fairness, let alone legality. Remember when George Bush was 'shredding the Constitution?' Ah, those were the good old days! Now we have Congressional Democrats trying to give themselves political cover by advocating patently unconstitutional legislation singling out a few hundred employees of a single company for a 'tax' that would reclaim money that they were promised, and earned, with the full knowledge and consent of the Federal Reserve and, it turns out, Congress."
• NRO's Yuval Levin: "As a general matter, the anger about the AIG bonuses is understandable and probably largely well-placed, but our elected officials really need to think before they speak, because they're sending a message to the potential future investors and financial sector workers who will be crucial to a recovery that perfectly legal contractually arranged payments and profits are subject to arbitrary retroactive rescission at the whim of panicked politicians. [...] That's not to say that the AIG bonuses are not outrageous, but the severe and ugly overreaction we're seeing (and especially the prospect of micro-targeted punitive taxation, let alone personal threats) is very bad for American capitalism."

Geraghty is also critical of the GOP proposal, which instructs the Treasury Dept. "to recoup or stay the payment of AIG bonuses": "I'm underwhelmed with the first part of the House GOP's proposal to deal with the AIG bonuses. [...] Some bonus recipients are returning the money; in other cases, the money is gone; even the Democrats' 'tax 'em until they bleed' strategy won't affect those who are foreign citizens. I'd prefer if the GOP used this mess as an argument for no additional federal bailouts. Companies that make bad decisions can no longer look to Uncle Sam to save them from the consequences of their actions."

AIG II: Take These Bastards To Court!

Several liberal bloggers are urging the DoJ to launch a criminal investigation into AIG, as they see evidence for criminal activity in various divisions of the company:

• dday: "I think we need to stop looking at AIG as simply a failed company and more like a criminal enterprise."
• Daily Kos' Jed Lewison: "As Josh [Marshall] says, we need to take a broader view of AIG's malfeasance. We are all justifiably outraged by AIG's handling of the bonus issue. But if it turns out that AIG was involved in a criminal conspiracy to commit fraud, the bonuses will take care of themselves. It's unrealistic to expect Tim Geithner to adequately address either either issue -- the potential criminal wrongdoing, or the bonuses. He's got enough on his plate trying to stabilize the financial system and usher in an economic recovery. But the Obama Administration does have a responsibility not just to make sure taxpayers don't get screwed, but also enforce the rule of law. That's why there's a Department of Justice, and that's the job of the Attorney General."
• Obsidian Wings' hilzoy: "I hope that every law enforcement agency with anything resembling jurisdiction goes over everything about AIG-FP with a fine-tooth comb. There are more than enough peculiar aspects to this story to warrant it. There's nothing like legal liability and high-profile prosecutions and lawsuits to put the fear of God in people. And the Masters of the Universe badly need a little fear of God right now."

GEITHNER: He's Gotta Go

Liberal bloggers continue to criticize Geithner and urge Obama to replace him:

• Open Left's David Sirota: "[I]n light of the fact that Tim Geithner was intimately involved in the original AIG bailout as a top Federal Reserve bank official, it's fair to say he has either lied about when he knew about the bonuses, or he is totally incompetent and out of the loop on major economic issues. Now, we get this from Time magazine confirming that his department knew about these bonuses far earlier than he admits. [...] I said it before and I'll say it again: In light of the lying or the incompetence (or, perhaps, both), it's time for President Obama to fire Tim Geithner and Larry Summers, and replace them with more competent people."
• AMERICAblog's Chris in Paris: "Obama is in a deep hole with this problem and does not have the right team to move forward. He can either stay with [Geithner] or cut his losses now and find a grown up who is more focused on helping the country as a whole instead of remaining friends with Wall Street. As I've said before, Obama is making a mistake if he thinks this is not going to drag him down. The entire process including bringing in Geithner and his team has been chaotic and that does not help bring confidence to anyone."
• AMERICAblog's Joe Sudbay: "[N]ote to Tim Geithner: Let's hope you've figured out by now that you work for Obama, not Wall Street. Your old pals in the biz are making you look really bad. They're not your friends now. So, start working for the American people."
• Atrios: "Obama's big mistake was hiring Larry and Timmeh."

BAYH: Time To Put The Brakes On The Obama Agenda

Needless to say, liberal bloggers did not welcome Bayh's announcement that he's created a caucus of moderate Dem senators:

• Mother Jones' Kevin Drum: "[I]t's about time, isn't it? We've now gone nearly a full two months without Democrats forming a circular firing squad designed to bring down a Democratic president and prove that Democrats can't actually get anything done. I say, that's two months too long. But at least a bunch of senators will get to preen a bit about how they managed to water down progressive legislation and get the White House to beg them for their votes. And that's what public service is all about, isn't it?"
• MyDD's desmoinesdem: "Of the Moderate Dems, only [AR Sen. Blanche] Lincoln, [LA Sen. Mary] Landrieu, [AK Sen. Mark] Begich and [NE Sen.] Ben Nelson represent states carried by John McCain. Why did the others rush to join a caucus that (based on Bayh's record) will try to water down President Barack Obama's agenda? [...] The severe recession may make next year a tough environment for the president's party to begin with. If Democrats carrying water for corporate interests sink 'the change we need,' Democratic base turnout could drop significantly, as it did in 1994. Most of the Moderate Dems Working Group members will not face the voters until 2012 and 2014, but their obstruction could harm many other Congressional Democrats."
• The Atlantic's Ta-Nehisi Coates: "Clearly [Bayh's caucus] is needed because the greatest threat to the Democratic Party -- with Tim Kaine chairing the DNC, Hillary Clinton at the State Department, Lawrence Summers directing the National Economic Council, Rahm Emanuel as Chief of Staff, and Bob Gates in the Pentagon, pro-lifer Harry Reid as Majority Leader -- is a Marxist plot hatched by Dennis Kucinich and the ghost of Paul Wellstone. Look, I'm not opposed to moderation or pragmatism as a principle. But what I see below from Evan Bayh is a rather shallow, sanctimonious, self-congratulatory, voodoo moderation. Here is a Senator who co-sponsored the resolution for the Iraq War -- arguably the most delusional, Utopian act since Vietnam -- talking up his pragmatist credentials. Laughable."

The fact that Bayh chose to announce his plans on Morning Joe -- which is hosted by conservative MSNBC pundit Joe Scarborough -- only confirmed that netroots' belief that Bayh's intentions are bad:

• Think Progress' Matthew Yglesias: "It's been known for a while now that Senator Evan Bayh (D-IN) has been planning to form a caucus of 'moderate' Senate Democrats hoping to soak up special interest cash in exchange for blocking the progressive agenda. I'm told he more formally announced the formation of this group this morning, on Morning Joe, to acclaim from Joe Scarborough and Pat Buchanan. It's nice to see that Bayh isn't even pretending that what he's advancing is some alternative vision of progressive change -- it's something he expects, rightly, die-hard rightwingers to find pleasant."
• The Washington Monthly's Steve Benen: "Joe Scarborough (conservative Republican) was thrilled to hear about Bayh's new venture. Pat Buchanan (conservative Republican) was glad to hear it. Far-right blogs think this is a great idea. This should offer a fairly significant hint to Bayh about the value of this endeavor. It's all rather painful. The president -- you know, the one who just easily won a national election and enjoys strong approval ratings -- will face governing challenges in a Senate in which his own party has 58 (eventually, 59) members. Part of the problem is Republican obstructionism, and part of it is Bayh and the Blue Dogs who feel more comfortable driving with their foot on the brake."

One liberal blogger, Daily Kos' David Waldman, isn't too worried about Bayh's "moderate" caucus because the members of his caucus "[are] not voting with him". Meanwhile, conservative blogger Morrissey is pleased that Bayh's group "want[s] to put some speed limits on Obama's agenda."

THOUGHT OF THE DAY: Enough With The Faux Outrage

Spruiell:

"Ed Liddy sized up this situation when he got to AIG and came to the conclusion that the best course for taxpayers and for the financial system was to pay the bonuses. This gets back to something I wrote earlier: If Obama disagrees with Liddy's decision, he should either A) fire Liddy, or B) fire the guy who hired Liddy (Tim Geithner). What he should not do is go along with this Kabuki outrage, in which official Washington pretends it had no idea that big financial institutions -- especially failing ones -- might need to keep paying their top employees competitive salaries."

LEST WE FORGET: Tweets From The Roman Senate During Cicero's First Oration Against Catiline

McSweeney's contributor Daniel O'Keefe:

• "One doesn't want to sound snarky, but it's nice not to see Sulla up there."
• "'O tempora, O mores'? O give it a rest."
• "Somehow the best seats are reserved for patricians."
• "Pompeius Magnus is here!"
• "I can't believe Catiline actually showed up for this."
• "Cicero's definitely planning a bid for praetor."
• "I'm sitting behind Cato the Younger."