No One At White House Realizes President is De Facto CEO of AIG

There is much hand wringing and continual cries of “outrageous” from the Obama Administration over the AIG bonuses. Mere displays of consternation are not going to be enough to still the righteous fury of the American public over the original ‘too big to fail’ company, though.

Put simply, many Americans viewed the original corporate bailout – all $700 billion worth – as inherently unfair, as a reward for the corporate thugs who wrecked the entire U.S. economy.  I fear this issue of $165 million in bonuses could be like an interception thrown deep in an opponent’s territory — a momentum crushing political game changer for the president.

The video at the end of this post, I believe, shows the disconnect.  White House aide Austan Goolsbee is interviewed by Chris Matthews on Hardball.  Goolsbee comes across as insincere in his pique with AIG.  He says the president is outraged, the Treasury Secretary is outraged, blah, blah, blah.  He is seemingly exuberantly outraged himself, saying by God, these AIG guys shouldn’t be allowed to have a meal out in a restaurant let alone those poor taxpayers’ money!  Frankly, it looks like an act, it feels like an outrageous act.

The Obama Administration is talking about – I don’t know if it’s policy yet, or what it will take to make it policy – allowing local judges to change the terms of mortgages between homeowners and their lenders.  This sounds an awful lot like jimmying with contracts.  On the other hand, the Obama Administration is playing the outrage game over AIG’s use of bailout money – mugging for the cameras – yet shaking their heads, looking at their shoes and saying, “You know, it’s these damn contracts … these guys have us over a barrel.”

Here’s a question for Washington: When does our 80% stake in this pathetic company begin to mean something.  Doesn’t 80% ownership give the American people – through their elected representatives – a say?  Isn’t the President Obama or Secretary Geithner the de facto CEO of AIG?

No more conspicuous displays of outrage over the likes of AIG, please.  Just do something, and at this point letting the whole damn company collapse would be as good as pulling the plug on the pigs’ bonuses.

After A Weekend of Bad Press, Obama Officially ‘Outraged’ Too

I Think AIG Has the President’s Attention

Barack Obama From the Washington Post:

“Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” Obama said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?” He said he has asked Treasury Secretary Timothy F. Geithner to “pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”

Obama added: “What this situation also underscores is the need for overall financial regulatory reform, so we don’t find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions, so we’ve got greater authority to protect the American taxpayer and our financial system in cases such as this.”

(UPDATED 1) Totally Unbelievable: AIG to Pay Out $100 Million in Bonuses To Its Financial Products Division

I am so angry right now, I can’t see straight and I may not be thinking clearly.

President Obama, this crap has got to stop.

The New York Times is reporting tonight that AIG, the world’s largest insurer and the original company deemed “too big to fail” will be paying out $100 million in bonuses shortly.  The government of the United States has shoveled $170 BILLION in AIG’s coffers since last fall in an effort to keep the company afloat.

A once venerable insurer, AIG began gambling on Wall Street some time ago in the credit default swap market.  These financial products, which are essentially insurance, are unregulated by the U.S.  According to multiple accounts in the media since last September, AIG is thought to have guaranteed trillions of dollars in these swaps.

Essentially, in a credit default swap, one party – the insurer – guarantees it will cover the full original value of a financial deal.  The purchaser of the swap pays a “premium” which is usually a percentage of the amount being guaranteed.  In the case of the current economic crisis, the financial deals being covered in these insurance gambles were the bundles of good and bad home loans – mortgage backed securities.  Companies like AIG thought they were raking in free money because, they believed, housing prices would continue to rise.  The housing bubble burst, the underlying bundles of loans became worthless and the swap purchasers are demanding their “insurance” settlements – the original values of the bundles of mortgages.  AIG and other financial institutions who sold credit default swaps don’t have the cash to make good on their obligations.

I fully understand “priming the pump” and the need for increased government spending to kick start a stalled economy.  I do not understand the unaccountable, opaque bailouts of private corporations.  I do not understand the total lack of accountability and justice for the companies like AIG who brought this mess down upon us.

The Times reports:

An official in the Obama administration said Saturday that Treasury Secretary Timothy F. Geithner had called A.I.G.’s government-appointed chairman, Edward M. Liddy, on Wednesday and asked that the company renegotiate the bonuses.

Administration officials said they had managed to reduce some of the bonuses but had allowed most of them to go forward after the company’s chief executive said A.I.G. was contractually obligated to pay them.

In a letter to Mr. Geithner, Mr. Liddy wrote: “Needless to say, in the current circumstances, I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them.”

Geithner “asked that the company renegotiate the bonuses?”  Are you fucking kidding me?  Geithner should have demanded that the bonuses not be paid.  Administration officials are actually taking this crap that AIG is “contractually obligated” to pay these pigs for screwing every single American taxpayer?  This financial crisis is a national emergency – I would expect that after $170 billion thrown down AIG’s maw we would have more leverage than to roll over because of a contractual obligation.  Where are the lawyers?

The one major disappointment I have with the Obama Administration is that the change we were promised is so far merely nibbling around the edges of the financial crisis.  For all of my conservative friends out there who wring their hands every time the word ‘nationalization’ comes up, this circumstance is what nationalization may cure.  This is our money being given to greedy pigs who are held harmless from the havoc they’ve wrought.  Temporary nationalization of these big companies would at least give our government control to go in and clean house.

If we don’t have the political will for nationalization or to hold Wall Streeters accountable, then it’s time to begin letting these companies go bankrupt.  Half the country seems to want this purity of the marketplace, give it to them.  If AIG were in bankruptcy, I believe these contractual obligations would go by the boards.

Update: 1 a.m. Sunday

The current version of the NYT story is now different from the block quote above.  I’ll bet there was some screaming from the Administration about Geithner ‘asking’ AIG to renegotiate bonuses.  The newer version of the story has Geithner portrayed as more forceful.  However, that doesn’t change a thing.  The newer version also points out that the U.S. government (us/we) own 80% of AIG.  If that’s the case, someone needs to have the stones to put a stop this sort of behavior.  AIG is not playing with their money now, they’re wasting ours.

From the Times:

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Mr. Geithner last week pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.

The payment of so much money at a company at the heart of the financial collapse that sent the broader economy into a tailspin almost certainly will fuel a popular backlash against the government’s efforts to prop up Wall Street. Past bonuses already have prompted President Obama and Congress to impose tough rules on corporate executive compensation at firms bailed out with taxpayer money.

A.I.G., nearly 80 percent of which is now owned by the government, defended its bonuses, arguing that they were promised last year before the crisis and cannot be legally canceled. In a letter to Mr. Geithner, Edward M. Liddy, the government-appointed chairman of A.I.G., said at least some bonuses were needed to keep the most skilled executives.

Obama Administration Will Increase Food Safety Inspectors

For years, critics of the Food and Drug Administration have shouted from the rooftops on the need to increase food inspectors.  It appears the Obama Administration will be doing just that.

In his weekly address today, President Barack Obama said:

As part of our commitment to public health, our Agriculture Department is closing a loophole in the system to ensure that diseased cows don’t find their way into the food supply. And we are also strengthening our food safety system and modernizing our labs with a billion dollar investment, a portion of which will go toward significantly increasing the number of food inspectors, helping ensure that the FDA has the staff and support they need to protect the food we eat.

When we argue over the proper role of government in society, sometimes it’s the obvious things that get left behind in the political battles.  With multiple issues with Chinese products and one of the largest producers of peanut products in the country is found to have serious health problems in two of its plants, who is supposed to protect our safety?  The Bush Administration knew there weren’t enough inspectors to adequately cover all the bases.  One has to ask why wasn’t this action taken at the White House level months ago?

To all of my “tea-partyin’” friends out there, this sort of thing is what we’re talking about when those of us who voted for President Obama speak of change.  Today’s action is a prime example of government priorities shifting from being a door mat for big business and begin serving the American people – all of them – once again.

Obama Answers Question on Seeming Disagreement With Strickland on Charter Schools

President Barack Obama was interviewed this week by a group of regional newspaper reporters, including Stephen Koff of the Cleveland Plain Dealer.  During the interview the subject of charter schools, and specifically the seeming divergence of opinion between Obama and Ohio Gov. Ted Strickland.  The transcript does not identify the questioners by name, but perhaps this was Koff’s?

(Source: White House Press Office – Partial Transcript Below)

QUESTION:  Mr. President, yesterday you called for eliminating restrictions on the number of charter schools while enforcing some vigorous standards. In Ohio, the Governor has called charter schools a destructive influence on public education, a few years ago tried to have a moratorium on new charters, now wants to cut state spending by about 20 percent for charter schools and restrict some other funding. I’m wondering whether you’ve ever talked with him about this, and is this just a fundamental disagreement between the two of you?

THE PRESIDENT: You know, I haven’t had a conversation with Governor Strickland. I know that part of his concern was prompted by some bad experiences with charters in Ohio that weren’t up to snuff. And if you looked at my statement yesterday, what I said was not only should we lift the cap on charters, we should also shut down charters that aren’t meeting standards. I don’t think that’s inconsistent with Governor Strickland’s position.

My goal here is to create laboratories of innovation so that in the public school system, we are on a race to the top as opposed to stuck in the old ways of doing things. And we’ve got to — we’ve got to do that. In your home town of Cleveland, I don’t know off the top of my head what the dropout rate is, but I’ve got to assume that it’s hovering around 50 percent. If you look at the number of children going through the Cleveland public schools who are actually prepared to go to college, it’s probably one out of seven or eight or 10. And that’s just not acceptable. It’s not acceptable for them, it’s not acceptable in terms of America’s economic future. And so we’ve got to experiment with ways to provide a better educational experience for our kids, and some charters are doing outstanding jobs.

So, the bottom line is to try to create innovation within the public school system that can potentially be scaled up, but also to make sure that we are maintaining very high standards for any charter school that’s created.

Obama Signs Spending Bill, Issues Signing Statement

President Barack Obama’s administration is going to review former President G.W. Bush’s signing statements, but Obama is not giving up this presidential practice.

I’d like to read the statement Obama signed today after he signed the spending legislation, but I can’t because it’s not on his website.  The positive stuff of the day, such as an EO regarding the White House Council on Women and Girls made it up.

You can read what the Associated Press wrote about today’s events, here’s part of it:

Two days after criticizing his predecessor for issuing guidelines on how to put legislation into practice, President Barack Obama issued such a directive himself.

Out of public view Wednesday, Obama signed a $410 billion spending bill that includes billions for items known as earmarks, the targeted spending that lawmakers direct to projects in their districts. Obama promised during the presidential campaign to curb such spending.

He also issued a “signing statement” in which he objected to provisions of the bill that he said the Justice Department had advised “raise constitutional concerns.” Among them are provisions that Obama said would “unduly interfere” with his authority in the foreign affairs arena by directing him how to proceed, or not to, in negotiations and discussions with international organizations and foreign governments.

Another provision, Obama said, would limit his discretion to choose who performs specific functions in military missions.

On Monday, Obama ordered a review of former President George W. Bush’s guidelines for implementing bills passed by Congress — the signing statements.

Text: President Obama on Earmarks Reform

(Source: White House Press Office)

THE PRESIDENT: Good morning. I ran for President pledging to change the way business is done in Washington and build a government that works for the people by opening it up to the people. And that means restoring responsibility and transparency and accountability to actions that the government takes. And working with the Congress over my first 50 days in office, we’ve made important progress toward that end.

Read more

Full Text: White House Memo to Cabinet Agencies – Scientific Integrity

(Source: White House Press Office)

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT:  Scientific Integrity

Science and the scientific process must inform and guide decisions of my Administration on a wide range of issues, including improvement of public health, protection of the environment, increased efficiency in the use of energy and other resources, mitigation of the threat of climate change, and protection of national security.

Read more

Full Text: President Obama Speech on Stem Cell Policy Change

(Source: White House Press Office)

Today, with the Executive Order I am about to sign, we will bring the change that so many scientists and researchers; doctors and innovators; patients and loved ones have hoped for, and fought for, these past eight years: we will lift the ban on federal funding for promising embryonic stem cell research. We will vigorously support scientists who pursue this research. And we will aim for America to lead the world in the discoveries it one day may yield.

Read more

Obama turns the racial argument to one of socioeconomics

From the New York Times today, President Barack Obama says he wishes Attorney General Eric Holder would have chosen different language than “nation of cowards” when describing Americans and their ability to deal with race.

I stand by what I wrote earlier, I like what Holder said.  I think he’s a smart guy who gave a speech dealing with the issue in a nuanced way.  He was thinking and communicating.  For the previous eight years we became accustomed to a lot of communication without much thought.  During the presidential race there was even a minor debate among political watchers about whether or not the sort of intellect displayed by Barack Obama and other Democrats would play well with a public grown accustomed to having the world described to them in Bushian ‘black and white’ terms.

I wish Obama wouldn’t have “chided” Holder, as the Times puts it.

The president did take a moment to get at a bigger problem that sometimes gets confused with race: socioeconomic status.  Obama was asked further about the “cowards” comment:

Mr. Obama was asked whether he agreed with Mr. Holder. He hesitated for five seconds before responding.

“I’m not somebody who believes that constantly talking about race somehow solves racial tensions,” Mr. Obama said. “I think what solves racial tensions is fixing the economy, putting people to work, making sure that people have health care, ensuring that every kid is learning out there. I think if we do that, then we’ll probably have more fruitful conversations.”

Transcript: Obama Interview with New York Times Aboard Air Force One – May Negotiate with Taliban

(Source: New York Times)

President Obama spoke in a 35-minute interview aboard Air Force One on Friday afternoon as he traveled from Columbus, Ohio to Andrews Air Force Base. This is an edited transcript, as recorded by The New York Times.

Q. You said it’s going to take a long time to get out of this economic crisis. Can you assure the American people that the economy will be growing by the summer, the fall or the end of the year?

A. I don’t think that anybody has that kind of crystal ball. We are going through a wrenching process of de-leveraging in the financial sectors – not just here in the United States, but all around the world – that have profound consequences for Main Street. What started off as problems with the banks, led to a contraction of lending, which led in turn to both declining demand on the part of consumers, but also declining demand on the part of business. So it is going to take some time to work itself through.

Read more

Full Text & Video: President Obama’s Weekly Address – March 6 – Personal Economic Hardships and Federal Action

Full Text of Address Below Video

(Source: White House Press Office)
Yesterday, we learned that the economy lost another 651,000 jobs in the month of February, which brings the total number of jobs lost in this recession to 4.4 million.  The unemployment rate has now surpassed 8 percent, the highest rate in a quarter century.

These aren’t just statistics, but hardships experienced personally by millions of Americans who no longer know how they’ll pay their bills, or make their mortgage, or raise their families.

From the day I took office, I knew that solving this crisis would not be easy, nor would it happen overnight.  And we will continue to face difficult days in the months ahead.  But I also believe that we will get through this — that if we act swiftly and boldly and responsibly, the United States of America will emerge stronger and more prosperous than it was before. Read more

White House Press Office Getting Better, Obama CIO’s data.gov Will Be Transparency Writ Large

I’m still not sure why the Bush press office could deliver press briefing transcripts within two to three hours of the briefing and the current staff don’t manage to get them up until the next day sometimes, but the Briefing Room at the White House has improved.

When I last wrote, I got some email criticism that I unloaded too quick on the Obama White House for not living up to President Obama’s constant refrain of a more accessible, transparent federal government.  Perhaps the critics were right, because overall the site has improved.

I was an early critic because I believed in what candidate Obama said about the need for transparency and easy access to information – and I voted for him partially on this issue.  The executive branch under Presidents Bush & Cheney seemed like a cold, bleak wilderness on too many matters of public substance.  I understand the power of technology to get information out there quickly and I know the Obama team is capable.

So, after about six weeks, here’s what’s looking better:

• Now there are press briefing and gaggle transcripts
• Speeches are posted quickly as they were during the campaign
• Availability of White House photographer work is more available – and the pictures are more interesting
• There has begun to appear, on some issues, links to further background information and executive branch analysis on some topics – the President’s foreclosure relief efforts for one

Room for improvement:

• Briefing transcripts would be nice within two to three hours of the briefing – sometimes they’ve been delayed until the next day
• More background information would be great, similar to that which was provided around budget and foreclosure issues
• Go easy on the marketing slant.  This president is kicking ass.  You have to sell us during the campaign, he’s the president now, more straight information.

Great News of the Day on Transparency – data.gov coming

President Barack Obama today appointed Vivek Kundra the federal Chief Information Officer.  According to a web article on Computerworld, Kundra told a conference call of journalists that his first major project will be establish a website serving as a clearinghouse for federal government data, which is planned to be located at data.gov.

The federal government collects an enormous amount of interesting data but it’s currently spread all over the place.  Kundra’s proposed project would be a boon to researchers, journalists and any citizen trying to look into the “numbers” on any given issue.

From the article linked above:

Kundra, in conference call today with reporters shortly after President Barack Obama named him as federal CIO said one of his first projects is to create a data.gov Web site to “democratize” the federal government’s vast information treasures by making them accessible in open formats and in feeds that can be used by application developers

NBC-WSJ Poll: Obama Maintains 60% Approval, Other Highlights, Full Text of Poll

• Presidential approval – 60%
• 56% approve of how Obama is handling economy
• Congress approval improves 8 points from January
• In December 49% of Americans had a very positive or positive feeling about the Democratic Party; In February that number is still 49%
• In December 27% of Americans had a very positive or positive feeling about the Republican Party; In February the number 26%
• 56% believe the partisan divide in Washington is the fault of both parties
• 56% believe Republicans oppose Obama agenda for political gain, while 30% believe they are standing on principle
• 1% very satisfied with U.S. economy
• 49% think the recession will go on for two or more years
• 48% believe helping some people in danger of foreclosure seems unfair/people have been financially irresponsible
• 61% concerned the federal government will spend too much money dealing with economy
• When asked which party could do a better job getting the country out of recession, 48% say Democrats, 20% say Republicans

Read Entire Poll

Video: President Obama Weekly Address – Keeping Promises – The Budget – February 28

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