The outrage-o-meter
Illustration by Peter Schrank
The Economist has an article on the outrage felt in the USA over the bonuses paid to AIG employees. Some of this outrage is genuine. Much Adam suspects is manufactured for political and self aggrandizement reasons.
No matter, what is worse is the damage done to the Obama presidency, as these extracts show:-
The affair is a test of the Obama administration’s handling of financial excess—and so far it has been ham-fisted.
That is probably an understatement.
The government’s back and forth has also damaged the credibility of the Federal Reserve, which has lent heavily to AIG and was aware of the bonuses several weeks ago.
Political management does not seem to be a strongpoint in this mess.
Then potential future presidential candidate:-
Andrew Cuomo, New York’s hyperactive attorney-general, entered the fray, slapping subpoenas on the firm and muttering about possible fraud. His office stoked public ire by revealing that 73 employees had received over $1m, and that $57m of its “retention” payments were earmarked for staff it planned to lay off.
Political grandstanding and self-aggrandizement by Cuomo. His’ bonus‘ the oxygen of publicity.
The furore over AIG is awkward for the new administration in several ways. First, it makes it harder to pin responsibility for botched financial rescues on the Bush team.
Political mis-management by the Obama team without a doubt. They may be able to win elections, but running a country is different. Obama needs to cease campaigning and start governing.
It does not help that Mr Geithner’s star is falling. His failure to get ahead of the problems at AIG follows his botched unveiling of a bank-rescue plan. Regaining his credibility will depend on the success of two new schemes: one to boost consumer lending by reviving securitisation, and another to remove toxic assets from banks (details of which are expected any day).
Adam suspects that Geithner is now a lame duck and will be re-shuffled as soon as can be managed without frightening the horses so to speak.
If Obama does not get a grip, he will be a one-term president.
Trackbacks
- Obama in Blunderland « The Inquiring Mind
- Change you can believe in. Yeah right! « The Inquiring Mind
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Barnsley
He is a Democrat
perhaps he should try and select some from outside the troughing tax dodging pool.
Actually he seems to have some difficulty in keeping his nominees
When you consider that he has all the villains from fannie mae and freddie mac on the white house payroll is it any wonder that all the others are reluctant to leave the trough.