I think it's pretty clear at this point that the AIG bonus scandal, and it is indeed a scandal, is the first clear instance where Obama's judgment will be called into question. And rightly so, for it didn't need to happen. There's chatter over at Talking Points Memo that the Congress had inserted language into the bailout money giving Treasury the final say over things such as bonuses, and Larry "we-don't-tell-our-banks-what-to-do" Summers stripped out the clause. Even if this particular anecdote is not true, it is clear the White House could have given itself control over AIG and chose not to. It was an ill-begotten decision borne of fealty to a blind, anachronistic ideology which properly died a natural death 200 years ago in the minds of thinking men. And hence our president, our new blind and deaf Don Quijote as Keynes would no doubt quip, had decided to write hundred-billion dollar checks to banks with no strings attached. The critics had said "you can't separate ownership and control. You'll get asset stripping." Yet our helpless President had entered a dark cavern where the glittering blade lie w/ Larry Summers, who *knows* that the government should let Wall Street run itself.
Thanks to the (well-founded) populist rage boiling throughout the country, I with the Obama Administration good luck in trying to get another bailout package through the Congress this fall when the banks (who say they are profitable) pony up to the trough for another $350 billion...
Friday Night Music: Warpaint, Elephants
8 hours ago