A Sense of Perspective About AIG
It’s a little bit difficult to know exactly how to phrase a post about the AIG suggesting that people need a bit more perspective about this that doesn’t come across as mere apologetics for the AIGsters and for screwups at the Fed, at Treasury, and at the White House. But read what Noam Scheiber has to say about this. Or note Ezra Klein’s observation about quantitative easing:
News of Bernanke’s “money from helicopters” maneuver is below the fold on the Wall Street Journal’s front page (though they do have a good roundup of expert reactions elsewhere on the site). Same goes for The Washington Post. Everyone, however, has continuing, above-the-fold coverage of AIG’s bonuses, which are about one-ten thousandth monetary value of the Fed’s move.
And it’s not just that the money is different in scale. The big macro moves out of the White House, the Fed, and the Treasury Department—the stimulus, the TALF, quantitative easing, the “stress tests”—are all important determinants of whether or not we’ll recover from this recession in a timely manner. Things like the administration’s health care and budget proposals are important determinants of social justice in the United States. The AIG bonuses are largely irrelevant to the recovery issue, and while important as a social justice matter they’re primarily of symbolic social justice importance. It’s good that people are outraged by this—it’s outrageous! And it’s good that in response to the outrage the government is now working to correct the problem. That’s the media-political-outrage cycle at its best. But it’s not healthy to just go ’round and ’round in circles over this issue endlessly. If 18 months from now the economy’s still shrinking and unemployment’s at 15 percent, nobody’s going to feel particularly happy about the fact that we stuck it to some scumbags from AIG back in early ‘09.
If there’s something the administration deserves criticism for, it’s the fact that most observers think their public-private partnership for bank recapitalization can’t work. If you want to talk about latter-day conservative populists being hypocrites, talk about their stances on the tax provisions in the budget. That’s the big stuff that’s still in play. On the bonuses, the politicians have heard people’s outrage and now seem determined to avoid future such blow-ups. It’s fine.
62 Responses to “A Sense of Perspective About AIG”
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March 19th, 2009 at 2:06 pm
AIG bonuses are 0.1% of the total bailout the company has received (so far). Moreover, the government is spending or investing trillions to try and save the dysfunctional financial sector. Don’t get me wrong, I hate those assholes in London who brought down a fairly respectable company, but it is just a distraction.
I wonder about one thing: why is there no popular outrage over the fact that the US has given tens of billions of dollars to European banks, via AIG? This story is not covered at all in the media. Why?
March 19th, 2009 at 2:09 pm
Chris Dodd, at it again:
FROM: http://news.yahoo.com/s/politico/20090318/pl_politico/30833
“Dodd just admitted on CNN that he inserted a loophole in the stimulus legislation that allowed million-dollar bonuses to insurance giant AIG to go forward – after previously denying any involvement in writing the controversial provision.”
BTW the all time top AIG campaign $$$ recipient: Chris Dodd at $281,038. George W.Bush, Chuck Schumer, Barack Obama, and John McCain round out the top 5 in the AIG whorehouse. Pity poor Max Baucus, the Chairman of the Senate Finance Committee. He didn’t make the top 5. He was 6th.
For a complete list of AIG’s working girls see:
http://www.opensecrets.org/orgs/recips.php?id=D000000123&type=P&state=&sort=A&cycle=A
March 19th, 2009 at 2:10 pm
The important thing is that this is starting to hurt ManU’s image. It’s getting worse than Ronaldo’s diving.
March 19th, 2009 at 2:13 pm
I think the administration and Congressional Democrats lying about their role in all this is something to criticize.
This is a Democratic scandal through and through. Conservatives had nothing to do with it. Democrats allowed the bonuses to go through, and are doing everything they can to put fingers at someone else. Fortunately, the American see through these charlatans.
March 19th, 2009 at 2:18 pm
Pick a different Man United player for your pictures already. I suggest the underappreciated Michael Carrick.
March 19th, 2009 at 2:18 pm
The problem is Obama just promised, in his first speech to Congress and the American people, that
If we can’t rely on Obama to keep his word on these symbolic things, things he finds important enough to mention in a major speech to Congress, then how can we rely him to properly address the large issues they are symbolic of? Wouldn’t we be wiser, at this point, to ask our representatives in Congress put his actions under very close supervision?
March 19th, 2009 at 2:20 pm
“If there’s something the administration deserves criticism for, it’s the fact that most observers think their public-private partnership for bank recapitalization can’t work.”
I have no idea what this means. You’re saying they deserve criticism because their ideas are being criticized? Can we really know if the criticism was deserved before we see if their plan actually does work or not?
March 19th, 2009 at 2:28 pm
foreign banks? how about Hank Paulson’s Goldman Sachs who made money by selling mortgage back securities at the same time it was shorting the junk mortgage market?
March 19th, 2009 at 2:28 pm
The only way their plan would be able to work is if the partnership overpaid for the assets. Since it’s unlikely that you’ll find any private individual willing to do that, the overpaying will have to be done by the government. I’d say it’s worth criticizing that.
I agree with Why oh why, the bonuses are bad, but the real story is the billions transfered to AIG’s counterparties.
March 19th, 2009 at 2:31 pm
http://www.youtube.com/watch?v=uVb2gbMtN3I
March 19th, 2009 at 2:32 pm
I think this is dead wrong. The AIG bonuses are indeed symbolic of social justice, and perhaps that’s what initially gave them populist legs. But they are also symbolic of incompetence on the part of the Obama team. That’s the real danger here, and that’s why the MSM won’t let this story go.
It’s the possibility that something relatively unimportant — financially speaking — may in the end do in BHO’s right hand man and undermine the chances for a second stimulus (and other initiatives) that has the MSM obsessed.
March 19th, 2009 at 2:32 pm
foreign banks? how about Hank Paulson’s Goldman Sachs who made money by selling mortgage back securities at the same time it was shorting the junk mortgage market?
Oh yeah, that too. If the US treasury was a division of Goldman Sachs, it really wouldn’t act any differently.
March 19th, 2009 at 2:34 pm
Hello Matt,
I think you’re missing the point that the AIG bonuses themselves are compelling evidence that “public-private partnership for bank recapitalization can’t work”. This is precisely why it’s a good thing, in my opinion, that the public has become outraged over them. I think it makes it more likely that the government will move towards temporary nationalization and actually hold the executives and bankers who got us into this mess accountable for their actions.
March 19th, 2009 at 2:35 pm
Perhaps I don’t realize the level of idiocy that is occurring on the cable news shows, but the reactions on blogs have not seemed all that outrageous. The significance of the whole affair for me as a liberal is that it shows that the administration, and specifically Geithner and Summers, may not actually care about restructuring the financial system so that this doesn’t happen again. They want to bail out their friends so we can all start gambling on the shitpile again.
The value of the bonuses is symbolic, but it is an important symbol of the administration not adhering to the ideas that most of it’s supporters voted for. And then the Dodd thing is just counterproductive for the whole party.
But again, maybe I’m a little too insulated from the absurdity.
March 19th, 2009 at 2:35 pm
The perception is growing that the real motive behind the AIG bailout is to save the posterior of Goldman Sachs: AIG appears to have become a staging post through which billions of taxpayers’ dollars travel into the coffers of Goldman Sachs and other banks.
http://blogs.telegraph.co.uk/gerald_warner/blog/2009/03/18/president_barack_obama_should_serve_the_taxpayers_not_goldman_sachs_and_liquidate_aig
March 19th, 2009 at 2:42 pm
Well Kafka, it’s good that your moniker is that of a fiction writer, because that’s what you are peddling here. For some perpsective on Kafka’s dishonesty see here and his backstop here:
I guess it shouldn’t matter, Kafka is lying, he knows he’s lying, and those paying attention know he’s lying. But it still bugs me.
March 19th, 2009 at 2:44 pm
I think that Josh Marshall is right on the optics here:
The impression is that the Masters of the Universe are dicking with Obama for the sake of dicking with him, doing so with impunity, and that they’re using Geithner and Summers’ status as part-time Masters of the Universe to do it.
At the same time, the personalising of gain and loss differentiates it from the surreal amounts of money that go into paying off the toxic shit, because that’s not money which can be spent on penthouses or coke snorted from hookers’ tits. That’s why Madoff’s fraud resonates, and that’s why Joe Cassano’s “retirement” contract resonates. Seriously, a million a month? People read that and they instinctively look for ways to compare it, and the only comparisons end up being with people like A-Rod and Kobe.
It’s the same basic psychology that motivated Reagan’s invocation of the mythical welfare mom in the Cadillac, and the reason why people still mention it. This isn’t money that fills in a black hole on a spreadsheet. This is yacht and private jet money. Trouble is, yacht-and-jet-money is the byproduct of disaster capitalism, in which the Banksters hold national economies to ransom.
March 19th, 2009 at 2:47 pm
More, right on, from Josh:
March 19th, 2009 at 2:49 pm
Just to add, my point about European banks: the US has in effect given about $20 billion to French banks. Why are the Republicans not all over this, instead of the $160 bonuses to a few assholes?
March 19th, 2009 at 2:52 pm
But they are also symbolic of incompetence on the part of the Obama team. That’s the real danger here, and that’s why the MSM won’t let this story go.
Only symbolic? Treasury pushes t otake the retroactive bonus language out of the stimulus bill; later Obama insists he is outraged that these bonuses were paid and demands Treasury exhaust every legal remedy.
Why is that not real, as opposed to symbolic, incompetence? Surely they ought to pick a position and at least stick with it for a week or two.
Geithner says he didn’t know until this week. Competent?
Axelrod says Barack led a White House meeting on Sunday (presumably after the talk show fiascos) to demand a way to recoup bonuses that had been paid out on Friday. Competent?
Obama has managed to present himself as angry, powerless, and out of the loop (and we know the feeling!). Is that really competent message management for the Most Powerful Man in the World?
March 19th, 2009 at 2:55 pm
(and we know the feeling!
Yes, your heroic efforts at getting Scooter Libby acquitted made that very clear.
March 19th, 2009 at 2:58 pm
Re SteveIL’s comment “This is a Democratic scandal through and through.”
————–
That is utter bullshit. This whole $10 TRILLION goatfuck is DIRECTLY due to Republican Incompetence, Republican Stupidity, and Republican Ideology that led them to kneecap federal regulation of the financial industry during the first 6 years of the Bush Administration.
That is what is so infuriating about Barack Obama’s kumbaya bullshit. A strong moral argument can be made that the Republican Members of Congress who are criticizing Geithner and calling for his resignation should themselves be swinging from the end of a fucking rope. For the damage their corruption and deceit have brought down upon this country.
But because our President doesn’t have a fucking spine, Democrats are being made scapegoats via Republican deceit.
Why in the hell can’t Geither , the AIG CEO,etc stand up at the Congressional hearings and tell the AMerican people that
the US Congress has NO standing to criticize the emergency damage control — because if that fucking pack of crooks had been doing their duty, this disaster would not have occurred to begin with.
March 19th, 2009 at 3:01 pm
Evil twin,
Give me a fucking break. Since when does treasury have the power to force the chairman of a Senate committee to do its bidding? Be a bit more even-handed here. Sure, Treasury told them that it would probably be a bad idea to keep that language in the bill…but Dodd (and his incompetent staff) went ahead and did it. They didn’t have a gun to their head.
Your quest to do-in Geithner is as transparent as your arguments. If only you knew that Geithner has no power whatsoever. Do yourself a favor and point your anger at the incompetence of Summers, Emmanuel and Axelrod/Rove. Those are the guys who’s scalps should be stuck on polls (metaphorically speaking).
March 19th, 2009 at 3:02 pm
As several posters have pointed out, Goldman Sachs was one of those getting AIG bailout gravy. More on Goldman:
FROM:
https://www.opensecrets.org/orgs/summary.php?id=D000000085
“Goldman Sachs is one of Wall Street’s most prestigious investment banks. Like others in the securities industry, it advises and invests in nearly every industry affected by federal legislation…..The firm tends to give most of its money to Democrats. Goldman Sachs’ former chief executive, Jon Corzine, served in the U.S. Senate as a Democrat from New Jersey. He’s now the state’s governor.”
Inquiring minds can construct a profile of Goldman Sachs’ working girls using the opensecrets data, similiar to what I’ve done for AIG.
March 19th, 2009 at 3:03 pm
Print copies of today’s Post, FT, and WSJ all have above the fold, front-page articles on the Fed. All placed more importantly than the AIG bonus stories.
March 19th, 2009 at 3:03 pm
Re Tom McGuire at 21: “Geithner says he didn’t know until this week. Competent?”
————–
If you’re managing a $10 Trillion bailout to keep the US economy afloat, why should you have to worry about $165 Million. This is typical Republican deceit — focus on irrelevant bullshit to distract the rubes from the Major Crime in Progress.
The Democrats should declare War on the Republican Party and go for its utter destruction. Because that is what it deserves.
But Obama won’t do it — probably because he is too busy sucking some rich dicks who don’t want their Republican puppets held accountable for the functional equivalent of grand larceny.
March 19th, 2009 at 3:04 pm
AIG owed them the money. If we’re giving AIG money to pay their debts, why wouldn’t they pay them to foreign creditors?
March 19th, 2009 at 3:07 pm
House passed the 90% bill. This is the Democrats Terry Schiavo issue.
BTW, I didn’t (don’t) support either. The Democratic party continues to march itself in oblivion. And as I’ll say again for the haters…This Republican congressional crowd is some the most incompetent sleezy, unprincipled charlatans. How you guys are giving them every opportunity to run things again…I just don’t know.
March 19th, 2009 at 3:09 pm
I second the demand for a different United player in these pictures. Wayne Rooney seems like a stupid asshole, so he’d be a good pick.
March 19th, 2009 at 3:12 pm
Evil Twin:
“Well Kafka, it’s good that your moniker is that of a fiction writer, because that’s what you are peddling here. For some perpsective on Kafka’s dishonesty see here and his backstop here:”
I’m glad you brought up Glenn Greenwald because he writes as if Dodd isn’t a creature of the insurance/financial industry when everyone knows he has been for a very long time. He may be a relatively good Senator, admitting nationalization is coming, etc, but still. Greenwald is shading his argument b/c he has an axe to grind against Obama and Geithner.
I hope they stick it to those corrupt managers, because the money is a lot to your average taxpayer, but in the scheme of things Obama and Geithner will be judged on whether or not we’re stuck in a recession for a decade. Matt and Scheiber are completely right.
(I like how AIG is saying we’ll settle with giving them half and the Senate says “we’ll raise you to taxing 35%!!!” i.e 65%, right? I think the House wants to tax something like 90%.) Obama’s got to do something now and I say that as an Obamabot, even if we grant a little perspective on the situtation.
March 19th, 2009 at 3:14 pm
AIG owed them the money. If we’re giving AIG money to pay their debts, why wouldn’t they pay them to foreign creditors?
Well, they could also have nationalized AIG, or let it fail, and bailout only American banks. Instead they decided to give money also to foreign banks: they knew who were AIG creditors.
I am not arguing whether it was the right thing to do. Just, it seems a much bigger story than the bonuses, and the idea that $20 billion of US taxpayer money was just handed to French banks seems like a dream come true for Republicans and FOX News. Yet they are not using it. Again, why?
March 19th, 2009 at 3:17 pm
They’re not using it because the whole global financial system is interlinked and they’re perfectly aware that if we start getting territorial about this sort of thing we’re in for the sort of depression that would give rise to a new Hitler. I don’t put it past these people to play with fire but they’re not going to play with a thermonuclear warhead.
March 19th, 2009 at 3:18 pm
“I wonder about one thing: why is there no popular outrage over the fact that the US has given tens of billions of dollars to European banks, via AIG? This story is not covered at all in the media. Why?
AIG owed them the money. If we’re giving AIG money to pay their debts, why wouldn’t they pay them to foreign creditors?”
It just reminds me of what John Kerry said about Iraq. Screw the Iraqis, we need to build firehouses here for our American firemen. Well, screw the foreign banks we need the money here in America to build firehouse for our American firemen.
With the US taxpayer bailing out foreign banks, shows how global the system really is. Freedom Fries!
March 19th, 2009 at 3:18 pm
My guess is that Obama–through Geithner–allowed those bonuses to be issued *intentionally* in order to whip up a firestorm of controversy. They could then distract the general public with the hearings and press coverage we’re now seeing. That makes it easier to take the repugnant steps necessary to save the economy. (the new 1.2Tn USD, QE, etc…)
Or it all could just be fortuitous coincidence.
Look! Evil bankers!
March 19th, 2009 at 3:19 pm
Why oh Why,
Then those European banks would have failed and we’d be in for a shit storm.
Also, it’s pretty difficult to break up what the European banks got vs. the American Banks vs. any bank. On some of these notes, you’ve got multiple banks all joined up together. That’s why AIG is alive today, and why it needs to stay alive until all of this stuff can be unraveled.
March 19th, 2009 at 3:19 pm
I don’t see why the payments to counter-parties are an outrage. That’s exactly why we gave them the bailout money in the first place. If AIG were to default on those contracts many, many banks and financial institutions would be severely damaged and forced into bankruptcy which would send the global economy into meltdown. What else could the money be for?
March 19th, 2009 at 3:24 pm
Were you expecting AIG to stack the bail-out money in a big pile and admire it? They insured crappy investments. When the investments tanked, AIG had to pay. Goldman Sachs had some of those investments. There isn’t a big secret here. Should we have made AIG agree not to pay anyone we don’t like as part of the bail out?
March 19th, 2009 at 3:28 pm
“As several posters have pointed out, Goldman Sachs was one of those getting AIG bailout gravy. More on Goldman:”
And they had previously said they weren’t on the hook to AIG! So they had lied basically.
I’m still suprised they released who the AIG money went to. Goldman Sachs was probably surprised too. Maybe people are getting economic crisis fatigue so they don’t care about the French bank.
March 19th, 2009 at 3:28 pm
I’m tired of people saying that this is “only symbolic.” Symbolism is important; symbolism matters.
And what these bonuses symbolize is that Wall Street still doesn’t get it. On a visceral level they do not and cannot understand the rage, hatred, and pain that average Americans are feeling. They seem to think that nothing has really changed, and that all they have to do is get over this rough spot and they can go back to business as usual. Fighting back against the bonuses is one concrete way in which Main Street is saying that business as usual is no longer acceptable. The whole reason for Obama’s election was that “business as usual” wasn’t working.
The bonuses are merely a symptom of the sociopathy that runs rampant among these Wall Street thieves. They are Rand’s ideal figures – men “without pain or fear or guilt” – and the rest of the nation has looked into their souls and are revolted to see that there is nothing there. We need to turn this anger against the entire Rand/Friedman/Reagan project of the last 50 years and smash the cult of greed once and for all.
March 19th, 2009 at 3:29 pm
Symbols are of things. All the numbers you quote are literally symbols.
The sheer quantity does not create matching symbolic power is something that economics is, of course, entirely unable to deal with. That is because economics is about fictitious creatures who exist only to compulsively accumulate more and more stuff. There are no such creatures, however, on earth. Well, save a few in mental wards.
What is the bonus a symbol of? It is a symbol of the awards system that brought about the trades in the first place. But, like all symbols, it is overdetermined – it is also a symbol of the establishment collusion, crossing ideological and party divides, that puts the well being of a small percentage of people – the extremely wealthy – far above the interests of the vast majority of people. It is a symbol of a systematic breakdown – just as Chernobyl was a symbol of the Soviet breakdown.
The establishment fear is that some kind of “populism” would occur – one which would make it impossible “recover from this recession in a timely manner”, with our bloated financial sector no doubt intact. Here the symbolism meets the deep assumptions of the establishment, which is that they had managed to get us to an economic nirvana, and that a few tweaks is all we need. Thus, throwing in a stimulus, which was needed, with TALF and the Fed’s compulsive desire to enrich the richest by all means possible, is symbolic itself – of a liberalism that really doesn’t want to change, or create change. We’ve really watched the endgame of this period of capitalism, and it is the most corrupt thing that has happened in American history. The looting involved, for instance, in having the Goldman Sachs alum treasury secretary meet with the AIG president and the Goldman Sachs CEO and appoint another Goldman Sachs Alum to supervise TARP so that AIG paid out fifteen billion dollars to Goldman Sachs – that could only happen in a culture confident of its immunity from all legal and cultural consequences.
Why the fight against symbols that are great symbols? Why would MY want Obama to miss this golden moment?
That is the more important question to me. Obama can use the bonuses to finally put in place strong limits on executive salaries. He can use it to jack up the marginal tax rates for a new income category – perhaps two, 500,000 and 1 million. He can use it to do the one thing any liberal should want done – systematically attack the structure of wealth inequality in this country.
March 19th, 2009 at 3:32 pm
Isn’t the one salient point about the AIG bonuses and future company conduct is the precedent it sets and the moral hazard it creates?
March 19th, 2009 at 3:33 pm
Ed Smithe:
Also, it’s pretty difficult to break up what the European banks got vs. the American Banks vs. any bank. On some of these notes, you’ve got multiple banks all joined up together. That’s why AIG is alive today, and why it needs to stay alive until all of this stuff can be unraveled.
It wouldn’t be difficult at all, give me a break. The newspapers have charts showing how much each was owed. But glad to see you’ve gone One-Worlder-Ozymandias-Alexander-the-Great on us. I agree, if there’s going to be one global economy, why not one global society/culuture with regards to immigration, laws, etc?
March 19th, 2009 at 3:35 pm
This couldn’t be more wrong.
The payments to AIG are important because they encapsulate how the Obama Administration is screwing up our economic recovery. This administration is showing clear signs of regulatory capture. At this point, AIG employees are literally looting the company, and the Administration does not appear to see or understand it.
It’s clear that the kind of people who made our financial markets into a mess are still in charge. They are still trusted by this administration. Their worldview still informs this administration’s decisions. This administration cannot or will not stand up to them. And they don’t have our collective interests at heart–they are LOOTING!
This is the economic equivalent of our nation’s failure to stop the looting when Saddam fell. Like that, this failure here demonstrates that we either don’t care or are unable to enforce measures to ensure the common good.
Obama needs to get this in hand. He needs to step back and start approaching Wall Street an entirely different way. We should not be returning to the Clinton era taxation. We should be going much, much further. Things like three or four new tax brackets for top earners with incredibly high marginal rates, taxing hedge fund manager income like regular income–those should be GIVENS. No more tax deductions for corporate cars and jets. The IRS should be closing every damn loophole that’s been inserted for the past 30 years. We should be sending people to take over these companies, and forcing them to do what’s in the public interest.
The reality is, we need to break the backs of this aristocratic class. They’ve built up a deficit for 30 years, they’ve put incredibly damaging policies in place, they caused this crash. And now they have to pay it off.
March 19th, 2009 at 3:36 pm
so someone shoot me a few million, it doesn’t amount to much in the scheme of things, right?
March 19th, 2009 at 3:47 pm
I don’t see why the payments to counter-parties are an outrage. That’s exactly why we gave them the bailout money in the first place.
You don’t see how your averaged US taxpayer might be miffed at bailing out a British or French or Swiss or German bank? What, do you work for AIG or something?
I believe bailing out AIG and its counterparties is the smart thing to do, but still.
Did we bail out any foreign S&Ls during the S&L scandal?
March 19th, 2009 at 3:56 pm
“Did we bail out any foreign S&Ls during the S&L scandal?”
Come on, be serious. The point of the AIG bailout was that if AIG defaulted on its obligations, the global financial system would be screwed. What we were trying to avert was making the post-Lehman chaos infinitely worse. The only way to do this was to ensure that AIG met its obligations. And if we hadn’t done this, the economy today would be in far worse shape. Of course the money went to big banks — it’s their failure that would create the systemic disaster that we were trying to avert. And it doesn’t matter if it’s Societe Generale or J.P. Morgan — if a giant bank fails, then the whole economy suffers.
March 19th, 2009 at 4:19 pm
And it doesn’t matter if it’s Societe Generale or J.P. Morgan — if a giant bank fails, then the whole economy suffers.
Quite a racket they got going. Maybe we do need international regulations. You must be as clueless as an AIG exec to not be able to grasp the issue here.
Bailing out AIG is also bailing out hedge funds who shorted the global economy which is awesome. See the Wall St. Journal (too lazy to find link).
March 19th, 2009 at 4:19 pm
It wouldn’t be difficult at all, give me a break. The newspapers have charts showing how much each was owed. But glad to see you’ve gone One-Worlder-Ozymandias-Alexander-the-Great on us. I agree, if there’s going to be one global economy, why not one global society/culuture with regards to immigration, laws, etc?
It kind of sounds like you could benefit greatly from a little reading about the Smoot-Hawley tarriff. Maybe there is a comic book about it!
March 19th, 2009 at 4:45 pm
So this is today’s White House spin mindlessly carried by the left’s water carriers?
March 19th, 2009 at 4:49 pm
Sooner or later the bailout has to end
there is $16 trillion dollars of swaps on the
books and there is no way they can all be paid
for at book value. Funneling money to AIG was a novel solution to prop up the capital system without trying
to untangle the entire mess but it is on its last legs.
Unfortunately Goldman has Geitner’s ear. His first bailout plan was very similar to a plan worked up at 85 Broad and floated before he was even confirmed The post stress test plan will have Goldman’s fingers all over it as well.
Don’t be suprised when the group charged with valuing all the assests and liabilities is lead by people pulled from the firm.
March 19th, 2009 at 4:52 pm
The Kool Kidz Klub (aka JournoList) strikes again. Tom Maguire does the work:
Who Doesn’t Love The JournoList?
How great is the JournoList, that off-the-record electronic salon where liberal journalists and policy gurus can exchange views, and which is emphatically *not* an echo chamber?
Let’s see – Matt Yglesias of JL on the AIG furor – it’s a distraction:
But it’s not healthy to just go ’round and ’round in circles over this issue endlessly. If 18 months from now the economy’s still shrinking and unemployment’s at 15 percent, nobody’s going to feel particularly happy about the fact that we stuck it to some scumbags from AIG back in early ‘09.
JL founder Ezra Klein on the AIG furor – its a distraction:
News of Bernanke’s “money from helicopters” maneuver is below the fold on the Wall Street Journal’s front page (though they do have a good roundup of expert reactions elsewhere on the site). Same goes for The Washington Post. Everyone, however, has continuing, above-the-fold coverage of AIG’s bonuses, which are about one-ten thousandth monetary value of the Fed’s move.
Noam Scheiber, JL member, on the AIG furor – it’s a distraction:
I have to say, I’m starting to find the obsessive “what did Geithner/Obama know and when did he know it” line of questioning a little tedious. Yes, it’s worth establishing a rough chronology so we know if public officials are telling us the truth. But the endless preoccupation by my colleagues in the media–when did the Fed tell Treasury, when did Treasury tell Geithner, when did Geithner tell Obama–is getting a little ridiculous. This just wasn’t a huge substantive mistake. It was a small substantive mistake–we’re talking about a tiny fraction of the $200 billion we’re floating AIG here–and a huge political mistake. I’m just not sure how helpful it is to reconstruct the genesis of a political mistake in painstaking detail when we’ve got these huge substantive issues to deal with.
Kevin Drum (gotta be JL) – it’s a distraction:
I don’t, frankly, care all that much about the AIG bonuses. The only reason AIG isn’t in Chapter 11 is technical (they’re too big to fail!), so morally I don’t see any reason not to treat them as if they were in Chapter 11 like any other failed company. That means employees stand in line for their bonuses along with all the other creditors. On the other hand, this whole thing really is small potatoes in the grand scheme of things, and Tim Geithner and the United States Congress have better things to worry about.
Don’t think of the JournoList as an echo chamber – think of it as a time saver!
Let me suggest one enhancement – why couldn’t they just designate one message as the JL Theme of the Day and post it at a dedicated blog. That would save us even more time since we wouldn’t be seeing the same message kicked around in non-echo chamberish fashion at multiple blogs. Of course, the downside is that we would miss the pleasure of seeing different artists present their cover version of the tune of the day. Tough call.
And since you asked – if Obama is not coordinating with his Treasury secretary, who is in turn talking neither to the Fed nor his missing staff, then yes, we have a real story here.
http://justoneminute.typepad.com/main/2009/03/who-doesnt-love-the-journolist.html
Of course I’m sure that this is a coincidence too:
Rahm: Obama Believes AIG Mess Is A “Big Distraction”
http://theplumline.whorunsgov.com/political-media/rahm-obama-believes-aig-mess-is-a-distraction/
March 19th, 2009 at 4:59 pm
Not only the JournoList controls all the media and corporations, but black helicopters and UFOs are circling around Campesino’s house.
March 19th, 2009 at 5:04 pm
Why oh why Says:
March 19th, 2009 at 4:59 pm
Not only the JournoList controls all the media and corporations, but black helicopters and UFOs are circling around Campesino’s house.
***********************************************************
Oh come on, everybody down at Matt’s post on Cramer told me they were controlled by GE!
March 19th, 2009 at 5:16 pm
Witness the Republican scam, as illustrated by Campesino at 52: Several liberals say AIG is a scam, so it must be a Journolist conspiracy. Conspiracy! Conspiracy!
Which allows Campesino to avoid looking at REALITY and seeing that:
(a) Yes , AIG bonus IS a stupid distraction –allowing Republicans to divert the voters attention away from that $10 Trillion buttfucking the voters have received from the Republicans — onto top of the previous $9 Trillion buttfucking delivered from those who rant about “Tax and Spend”
(b) Many other people –including myself — say so and we are not Jlist subscribers.
March 19th, 2009 at 5:57 pm
Don Williams:
AIG bonus is not a distraction, it’s a Democratic scandal, from the President, to Geithner, to Speaker Pelosi, Rep. Frank, Sen. Reid, Sen. Dodd, Sen. Schumer, and so on and so forth. Democrats put this into a bill they wrote without any meaningful Republican help or Republican votes (3 Senators out 219 Republicans in Congress) and signed by the Democratic President. Democrats own this.
March 19th, 2009 at 6:16 pm
It’s fine?
It’s fine?
What!
WHAT!!
Rage…building…inside.
I can’t speak. I don’t know what to say. You think that it’s fine that the administration lied to us about stopping bonuses, and only starting doing something about it to stop a riot in the streets?
Fuck you! Seriously. Fuck you! I’ll never read your bullshit again.
March 19th, 2009 at 6:37 pm
Don Williams Says:
March 19th, 2009 at 5:16 pm
Witness the Republican scam, as illustrated by Campesino at 52: Several liberals say AIG is a scam, so it must be a Journolist conspiracy. Conspiracy! Conspiracy!
=====================================================
No, no – Groupthink! Groupthink!
http://www.nytimes.com/2009/03/19/opinion/19kristof.html?ref=opinion
“The nation grows more politically segregated — and the benefit that ought to come with having a variety of opinions is lost to the righteousness that is the special entitlement of homogeneous groups,” Mr. Bishop writes.
One 12-nation study found Americans the least likely to discuss politics with people of different views, and this was particularly true of the well educated. High school dropouts had the most diverse group of discussion-mates, while college graduates managed to shelter themselves from uncomfortable perspectives.
The result is polarization and intolerance. Cass Sunstein, a Harvard law professor now working for President Obama, has conducted research showing that when liberals or conservatives discuss issues such as affirmative action or climate change with like-minded people, their views quickly become more homogeneous and more extreme than before the discussion. For example, some liberals in one study initially worried that action on climate change might hurt the poor, while some conservatives were sympathetic to affirmative action. But after discussing the issue with like-minded people for only 15 minutes, liberals became more liberal and conservatives more conservative.
March 19th, 2009 at 7:23 pm
Re Campesino’s “Groupthink” — there are several reasons why it is difficult to discuss politics with the rightwing:
1) They have NO tradition of honest discourse. Their blogs either do not allow comments (e.g, Instapundit) or they ban you if you introduce facts contrary to their party line.
2) They are extremely stupid. Which — as I noted in Nov 2007, is actually a silver lining:
“As I’ve noted before, there IS a silver lining to the Bush Administration. Bush has screwed millions of middle-class Republicans like dogs — their life savings are toast — and yet they lack the intelligence to realize it yet.
So those people like Fred who are still making earnest attempts to rationalize Bush’s reign give the rest of us reasons to break out in guffaws. It’s not quite as comical as Jay Leno –but close.”
Was I wrong, Campesino? Feeling that broken beer bottle lodged in your ass yet?
3) Hell, Richard Hack warned you on that same thread re what was coming — and you guys didn’t get the message:
“Not to mention that seven or eight months from now, we will officially be in a recession – and by some accounts, a bad one.
In fact, one guy is predicting about 4.5 trillion dollars – ten percent of the wealth of the nation – is about to disappear.”
So how is that 401K doing — ready to mail the house keys to bank and move into the trailer park?
4) Right wingers are incapable of judging weights and measures –of assigning due importance to various matters. Look at this uproar over the AIG bonuses –where was the outrage when Bush ran up a debt 36,364 TIMES the size of the AIG bonus?
Where was the outrage when Bush and the Republicans then triggered a disaster requiring another $8 Trillion in loans, guarantees,etc? By my calculation, Bush and the Republican leaders have screwed middle-class Republicans to the tune of
84,848 TIMES the size of the AIG bonus and those middle-class Republican morons STILL don’t even realize it.
March 19th, 2009 at 7:28 pm
Here’s where Richard and I were laughing at you guys about 15 months ago.
http://matthewyglesias.theatlantic.com/archives/2007/11/the_permanent_presence.php#comment-908328
We’re laughing harder now.
Better find some rich man’s ass to kiss –and hope he’s feeling generous. Like your President Bush, you’ll hit bankruptcy if you try to depend on your own capabilities. Maybe it the alcoholism.
March 21st, 2009 at 2:04 pm
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