But if our very own Secretary of the Treasury doesn't even learn of the bonuses until months after AIG has decided to pay them, and cannot make stick his decision that they should not be paid, AIG is not even accountable to the government. That means AIG's executives -- using $170 billion of our money, so far -- are accountable to no one.
Oh, and Larry the Bailout Guy's argument that we are somehow being "forced" to pay the bonuses because of prior contractual agreements is -- and I know this will surprise you -- deeply bogus:
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 (they would have had a lower priority under bankruptcy law that AIG's debts to other creditors); indeed, AIG's executives would have long ago been on the street. And any mention of the word "talent" in the same sentence as "AIG" or "credit default swaps" would be laughable if laughing weren't already so expensive.
It's starting to look to me like Larissa Alexandrovna is right:
The role of government in the modern era has become rather clear to me: it acts as a broker for the transfer of public money to private hands.* There is no actual governing.
Sure looks like that's what's going on here.
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Obama's political capital
is being squandered, fast.
Capital priorities
Maybe this *is* what Obama wants to spend his political capital on. Its becoming increasingly clear he doesn't want to "waste" it on single payer health care (or even health care that would get us to single payer in the not too distant future): he want to increase "access" not coverage from what I can tell.
Of course there is the possibility of some 11 dimensional chess game that he is playing and only he knows about. (Can we start calling that the "Gnostic Obama"?) But as far as I'm concerned, its looking more like this is a feature, not a bug of the Obama administration.
Only tyrants rig elections.
Greenwald reminds us of auto workers' contracts
AP article highlighted in Greenwald's piece today (emphasis mine):
Hey, everybody gets it,
including Josh:
As noted previously, the scale and nature of a lot of the losses at AIGFP go well beyond reckless and folly. A lot of it looks like fraud. And go-go operations like AIGFP don't tend to fair too well in general when subjected to searching legal scrutiny. The government should be making it clear that criminal investigators are reviewing the entire matter. Contracts don't easily withstand credible allegations of illegal behavior. And the executives in question need to have their attention focused on the calculus of levels of cooperation and legal vulnerability rather than compensation packages.
The Obama administration isn't going to get away with "We can't make them do it." I don't know why they're doing this little dance, but they'd better not screw this up. Obama's credibility, even with his diehard supporters, is on the line, and this cuts across the entire political spectrum.
emptywheel
Marcy Wheeler has a potential explanation:
But Couldn't The US Just Walk Away
from any agreement where the counterparty triggered the default and demanded payment. It's not like the US Government has a legal obligation to pay these debts. They're simply bailing AIG out. The US could decide not to bail AIG out and then France or whoever is fucked. So it seems to me it's a bluff that's meaningless.
"Do what you feel in your heart to be right -- for you'll be criticized anyway. You'll be damned if you do, and damned if you don't. " - Eleanor Roosevelt
I'm assuming...
...that in a world where the US government is borrowing money for a stimulus package, screwing over foreign economies may not be such a great idea.
I suggest the real solution is to pass a massive tax on bonuses, and then make it a criminal offense to be found storing money in the Cayman islands. This kind of thing has probably been the solution to a lot of problems for a long time, but you should not expect to see it any time soon.