Saturday, March 21, 2009

Buyer's remorse XVI

Chris Buckley
David Brooks
Kathleen Parker
Stuart Taylor
David Gergen
Clive Crook
Andrew Grove
Megan McArdle
Michael Gerson
William Galston
David Broder
David Ignatius
Some congressional democrats
Nina Easton
Peggy Noonan

Now it's Joe Nocera, NY Times.....

You know you're a democrat in trouble when the NY Times isn't carrying your water, let alone fantasizing about showering with you, anymore..........

How does outing these executives fix skewed compensation incentives, which have created that unjustified sense of entitlement that pervades Wall Street? No, it’s mostly about using subpoena power to satisfy the public’s thirst for blood. (In light of the death threats, when Mr. Cuomo received the list of A.I.G. bonus recipients on Thursday, he promised to consider “individual security” and “privacy rights” in deciding whether to publicize the names.)

Then there was that awful Congressional hearing on Wednesday, in which A.I.G.’s newly installed chief executive, Edward Liddy, was forced to listen to one outraged member of Congress after another rail about bonuses — and obsess about when Treasury Secretary Timothy Geithner learned about them — while ignoring far more troubling problems surrounding the A.I.G. rescue.

Oh, and let’s not forget the bill that was passed on Thursday by the House of Representatives. It would tax at a 90 percent rate bonus payments made to anyone who earned over $250,000 at any financial institution receiving significant bailout funds. Should it become law, it will affect tens of thousands of employees who had absolutely nothing to do with creating the crisis, and who are trying to help fix their companies.

Meanwhile, the real culprits — like Joseph J. Cassano, the former head of A.I.G.’s financial products division— are counting their money in “retirement.” Nobody on Capitol Hill seems much interested in getting that money back. (And the bill does nothing about bonuses that were paid before 2009, meaning that most of those egregious Merrill Lynch bonuses, paid at the end of last year, will not be touched.)

By week’s end, I was more depressed about the financial crisis than I’ve been since last September. Back then, the issue was the disintegration of the financial system, as the Lehman bankruptcy set off a terrible chain reaction. Now I’m worried that the political response is making the crisis worse. The Obama administration appears to have lost its grip on Congress, while the Treasury Department always seems caught off guard by bad news.

And Congress, with its howls of rage, its chaotic, episodic reaction to the crisis, and its shameless playing to the crowds, is out of control. This week, the body politic ran off the rails.

There are times when anger is cathartic. There are other times when anger makes a bad situation worse. “We need to stop committing economic arson,” Bert Ely, a banking consultant, said to me this week. That is what Congress committed: economic arson.

A true must read here....

1 comment:

Anonymous said...

I commented earlier that the witch hunt on the AIG bonuses will make companies think twice about whoring for govenrment money.

A couple of nights of bailout fun and AIG has disocvered that they have contracted a bad case of financial gonorrhea from the Tim Geithner and the Obama admin. Obama in turn has resorted to blaming AIG's prior partners for promiscuous behavior.

No matter what, companies across the country are scared to death. On one hand they want fun money from the government. On the other hand they have to be afraid of cowardly congressmen and governors rooting for populist mobs to show up with pitchforks on executives' driveways two weeks later.

This make a bad bailout that much worse. This makes it a sin to use bailout money to pay employees. There will still be trillions paid out. But it will be trillions paid out under cover of darkness and to well connected mystery recipients.

Now that's change we can believe in.