Book of the Month

Michael Wolraich's picture

Congress Shows Backbone on AIG Bonuses

Congratulations to the august members of the House of Representatives. You just saved America $148.5M. Of course, after countless hours of wrangling with the Senate, that will surely be reduced by half. And then, there will be the lawsuits challenging the bill-of-attainder tax on a particular company--a really, really, really bad company which deserves to be disemboweled and which we would definitely do if that pesky economic depression weren't in the way. But as I was saying, after the lawsuits and the bureaucratic overhead costs for collecting the cash, the DBO (Dagblog Budget Office) estimates the net savings for the American taxpayers to be somewhere between 0 and -$148.5M. But that doesn't matter because the point is JUSTICE! We demand that all the rich assholes deserve to pay the ultimate penalty for their greedy, greedy awfulness: TAXES! That will show the bastards.

Now I know that the American taxpayers elected George W. Bush, twice (OK, once), the same guy who lowered the taxes on the rich in the first place. And I know that we the people used to believe that the free market knows best and that the government should stay out of our wallets, purses, piggy-banks, and overvalued investments. I also admit that a few of us may have chuckled happily as our 401K's bustled and our houses boomed and Japanese HDTV's flowered like digital dandelions in our living rooms, bedrooms, dining rooms, anywhere else we could fit them, which is a lot of places because they're so incredibly thin. And maybe back then we weren't so down on greed, and so we nodded complacently while AIG and the other bad boys bought up all the mortgages that inflated our real estate and when they awarded those absurdly generous contracts with mandatory bonuses to the evil greedy bankers.

But that was before they sucked all the froth out of our 401K's and fired our neighbors and foreclosed our houses and forced us to sell 12 of our 15 televisions on craigslist so that now we only have one in the bedroom, one in the living room, and one in the den which doubles as a computer monitor so it doesn't really count. In short, that was before we were MAD!

And when the American people get MAD!, we don't want to sit around and wait for our plodding leaders to come up with plans and ideas and ways to make sure that this whole mess doesn't happen again after we're not MAD! anymore. We want JUSTICE! NOW! We want to see our our leaders stick it to some token bankers where the sun don't shine: their wallets! Let's see how many HDTV's they can buy now!

I had thought that our craven representatives would just hem and haw and talk about how mad they were but how the past was the past and how it was too late to stop the bonuses and how we have to think about the future. But I underestimated the willingness of our elected leaders to do the right thing, which is to say whatever they think will get them re-elected next time round. So thank you House of Representatives for standing up to the evil bankers and bowing, nay groveling, before the unrivaled wisdom of the American voter.

After sparring on this a bit over at TPM, we might as well bring it home.

I'm in complete agreement with Genghis about the craven hypocrisy of Congress, ladling out their fake outrage once they realized the extent of real popular outrage.
Legislation shouldn't merely parrot populist sentiment, but it's also essential that legislators recognize who their theoretical masters are: the voters, not the corporate lobbyists.
The clawback bill was necessary -- a necessary evil, perhaps -- as a wake-up call to business and government. Let's hope Obama channels the anger that led to it into meaningful financial reforms.

Yes, the bill is a messy solution to a problem Geithner and Dodd created for themselves by watering down the initial compensation rules. But at this stage, any solution was going to be messy. (Lawrence Tribe, by the way, has suggested the clawback would stand up in court.)

If I recall correctly, strict compensation rules were promised at the time TARP was first introduced. Seems to me that pledge to the American taxpayer trumps contracts signed in secrecy between a greedhead company and its greedhead employees.

These split-site discussions are weird, but I kind of like them. I makes me feel webtaculous. So you've said a few times you think the bill is necessary to defuse the anger, and I've so no it's not, the anger could be channeled into more productive bills, with neither of us offering any evidence. But I think that the burden of proof is on you here. Why is this bill necessary?

PS I liked your TPM post even though I disagreed with it

It's not just a two-site split, but a four-thread split: your post and mine over at TPM, and your post and Deadman's here. Quite confusing; excuse me if I repeat myself. But I accept your burden-of-proof challenge.

As I've said, I'm all for Obama channeling the anger too. Taking the AIG bonuses off the front burner (via the clawback bill) is an attempt to do precisely that. Defuse the issue, rechannel the anger into support for long-term financial reforms.

The danger in not defusing the AIG issue is a loss of presidential capital: an ARG poll suggests a six-point drop in approval for Obama's handling of the economy this month. Another six points and the Blue Dogs have him by the balls.

The political mess pitting Treasury vs. Congress, Geithner vs. Dodd, could also sabotage financial reforms, not to mention Son of Tarp, which everyone knows will be needed before long. That spat had to be smoothed over, and Obama had to do it without throwing Geithner under the bus (or at least off the bus) since that would further erode confidence and political capital.

A piece of legislation that mollifies populist outrage and manages to pass a not-overly-stringent smell test is just the ticket. It's clunky and messy, but as crafted it's probably constitutional. Not a model for future legislation, I agree, but it gets a necessary job done. Think of it as a Microsoft patch.

And Genghis, your webtaculousness has never been in question.

Great post and eloquently done. My fear, I still don't think people get it.

I'd like to give my opinion on your question. I can't say this particular bill was necessary but I do feel something needed to be done and as you say, this issue was expediate. The chatter was totally out of control and at a fervent pitch. Too often the populace conducts themselves like children who need to be pacified before moving on to the next task.

It will be interesting to see if this tax ever makes it into law. If not, what was lost? (many kids have short attention spans, they will forget about it when the next temper tantrum comes along)

Many days it feels as if we are in some alternate apartheid twilight zone. Too often it's the mob mentality (the minority) calling the shots. They react, and our leaders have a counter reaction to quell the noise. If the rational majority yelled louder, maybe we would get a different reaction from our leaders. Then again, maybe the majority of the population, is not rational.Undecided

That's my 1penny worth of thought. Thanks for listening.

Your thoughts are well worth the penny. It is the nature of politicians to obey the screamers, but I really think that this was an opportunity wasted. Instead of cutting off heads, Congress could have summoned the anger of the mob to enact import reform. Instead, we've so far done nothing to ensure that this won't happen again and again, as has happened many times before.

I see your point. Someone has to make the tough decisions. It seems to me the reforms will come though, at least that's what our President tells us. Maybe this wasn't the time. This "change" thing is still new with Congress, just as it is with the country.

Going from reactionary to visionary will not happen to these old dogs overnight. If we can't teach them new tricks, we'll just have to vote them out.

 

If they get voted out, guess who's going to get voted in?

The Dems have from 2 to 4 years to get it right.

Now that's a pretty sobering thought.

The thing is, it's not Congress or the President that concerns me the most. It's the American people. Let me try to explain.

I consider myself a rather passionate person but there is a difference in my minds eye between passion and emotion. The public seems to take every decision and every slight personally, in doing so they loose all objectivity.

There isn't any such thing as a perfect, idealistic Norman Rockwell life. Not in the broad sense. The public keeps fighting and screaming for something that doesn't truly exist.

The government's job isn't to protect us but to protect the Constitution. If they do that, we're covered, case close.

Now I'm not a strict Constitutionalist, it would be self defeating if I were. However I've always been fascinated with the idea that the Founding Fathers lived in an imperfect society and designed an imperfect document that in theory, could correct, imperfections.

My head is all over the place on this so I'm not even sure where I want to go with it. I guess what I'm saying, the only thing Americans want, is to get their flat screen TV's back. Feeling this way, it's a little difficult for me to get too upset with our government. They are, what we created. Until we truly recognize this, they always will be.

The Founding Fathers created a society within a mostly agrarian economic mindset. No thinkers in the centuries beyond the Age of Reason could possibly foresee the political and social complexities that technology would wrought. To ponder the founding of the great American Democracy is noble. But you have hit upon the nightmare with your comment on the flat screen.

Technology will kill democracy, not make it better.

I agree, who could have seen this coming. But when reading the Federalist papers and other documentation and letters from these old dudes, you get a better understanding of the intent. I see the Constitution as a living document and as such, it has the capacity to adapt to this new world.

The problem is electing the officials who "get it." The ones that see the basic intent of the document and who know how to expand on those ideas and principles without destroying the intent. If the American people don't understand it, how can they elect officials who do?

I don't know, for me, it's not an exercise in nobility but simple common sense, reasoning and logic.

I don't agree with technology killing democracy. It is what it is. How technology is used, is what could cause the destruction.

Democracy isn't fast enough or nimble enough to control technology, especially the technology that controls money. Ask any older farmer or rancher about the changes they've seen in the last 40 years as the agrarian culture that fed this nation and then other nations was destroyed by giant agribusiness corporations and their cohorts. These kinds of alliances are made possible by the way technologies favor instant profits over long-term capital preservation of land and resources. The average person has no idea about the power of international chemical companies to change and damage agriculture and by extension the very health of the citizenry. A stupefied populace that prefers television to books and newspapers remains inactive and immobile. I'm sorry to have lived to see it, and worry how my children and grandchildren will survive this damaged society, but I'm relieved also to just sit back and let the river roll. Not much to be done now but look back on it as a grand wake.

I don't agree that the government's only job is to protect the Constitution. The Constitution doesn't need to be protected. It simply needs to be obeyed and enforced. Obeying and enforcing the Constitution is a prerequisite but does not guarantee good government. An administration could remain entiredly within the bounds of the Constitution while systematically destroying the economy and infrastructure of the nation.

We elect the government to represent our interests. But sometimes, particularly at moments of mass hysteria--and I do believe that there is some hysteria running around lately--our interests don't coincide with what we believe them to be.

So we can have a government that indulges in our hysterical demands for vengeance or one that keeps its head and looks out for our long term interests. G.W. and Congress gave us a shining example of the former after 9/11. Let's hope that this government shows better judgment.

PS A request: please don't paste from MS Word. Word is evil, and it messes up the formatting for the whole page. When I have time, I'll try to do something fix the problem automatically. But in the meantime, if you write in Notepad or some innocuous text editor, it will be easier on the formatting. You can even write in Word, then paste into Notepad which will purge the formatting, then copy from Notepad into dagblog. Thanks and glad to you have writing in.

Sorry, I'll switch to notepad.

I understand what you're saying but do we really need government to protect our interest?

As individuals, what's important to us varies from person to person. We should be free to pursue our interest in accordance to what we feel is best for us. Laws are necessary so I'm not saying we don't need laws, we do!!!! But I'm adult and the government should not have to be placed in the position of being my parent.

They have their job and I have mind. If we take care of what's in our best interests without stepping on the freedoms of others, all of society benefits. The government should provide the tools in which to do this but they don't need to do it for us.

An idealistic dream on my part, but a dream I believe in.

 

I'm Computer challenged at times. Can I continue to edit in word and then copy and paste to note pad, and from there copy and paste to here? How would that work? DUH, neva mind, I should read more carefully.Embarassed

No worries. I blame Microsoft. Yell

We definitely see eye to eye on that score. I'm saving up for my Mac Pro as we speak.

Of course you know the problem. I want all the bells and whistles and the flat screen TV that comes with it.Wink

Latest Comments