Shades of Gray

White House concerned about backlash over bailout?

Posted in Bailout, White House by Wayland Abernathy III on March 17, 2009

It seems that folks in our White House are looking for ways to get out from under their bailout policies already; or at least explain away any direct involvement with those policies and their relation to the President’s agenda. It seems that people are actually complaining about what the President is doing. Can you believe that? What nerve…

The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Barack Obama’s agenda.

Hhhmmm. What gave them that idea? I bet it didn’t come up in the 8:30am conference call with “The Lefty Gang.” And to add to the fun:

The administration’s sharp rebuke of the American International Group on Sunday for handing out $165 million in executive bonuses — Lawrence H. Summers, director of the president’s National Economic Council, described it as “outrageous” on “This Week” on ABC — marks the latest effort by the White House to distance itself from abuses that could feed potentially disruptive public anger.

Sorry, folks, but you cannot get far enough away from the abuses that have been piled up. Guess what? There’s more fun to be had:

“We’ve got enormous problems that need to be addressed,” David Axelrod, Mr. Obama’s senior adviser, said in an interview. “And it’s hard to address because there’s a lot of anger about the irresponsibility that led us to this point.”

“This has been welling up for a long time,” he said.

That would be hilarious if this wasn’t just another way to show the American people that Obama is “doing what’s best for the Country.” Is Axelrod saying that “a lot of anger”, in the form of a populist backlash, is keeping President Obama from moving forward with his agenda? So now, the American people are to blame for holding up the gravy spending train? Is he serious?

Mr. Obama’s aides said any surge of such a sentiment could complicate efforts to win congressional approval for the additional bailout packages that Mr. Obama has signaled will be necessary to stabilize the banking system.

As it is, there have already been moves in Congress to limit compensation to executives at banks and Wall Street firms that are receiving government help to survive.

Yes, he is serious. This just isn’t funny anymore.

Why can’t Congress limit compensation to themselves before they try to force any business to do so? Congress is receiving government help to survive, too. And why can’t they seem to get through the vetting process without missing the obvious stuff? Don’t they have staffers that know what they are doing – yet?

An Employee Retention Plan (PDF) was in place between AIG and many of their executives. Whether these contracts would hold up under scrutiny remains to be seen. To date, a copy of a contract has not been submitted for perusal. Check out the letter that AIG CEO Ed Liddy sent to Treasury Secretary Timothy Geithner (PDF).

Enjoy the hearing by the House Financial Services Committee tomorrow at 10:00 am EST. Seems to me that Barney Frank continues to direct his hollering at the wrong people. Someone should throw up a mirror in front of the dais so the comments reach the proper party.

To continue:

A New York Times/CBS News Poll in February found that 83 percent of respondents said the government should cap the amount of compensation earned by executives of companies that are getting federal assistance.

Mr. Obama’s advisers argued that to at least some extent, this was a sentiment they could tap to push through his measures in Congress, including raising taxes on the wealthy. They pointed out that in his speech to Congress, Mr. Obama denounced corporations that “use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet.”

Has Nancy Pelosi incorporated herself? She and many others in Congress, across party lines, “use taxpayer money to pad their paychecks or buy fancy drapes or disappear on a private jet.” I’m just sayin’….

Still, aides acknowledged the risks of a backlash as Mr. Obama tries to signal that he shares American anger but pushes for more bail-out money for banks and Wall Street.

For all his political skills and his capturing of the nation’s desire for change in the 2008 election, Mr. Obama, a product of Harvard Law School who calls upscale Hyde Park in Chicago home, has shown little inclination to strike a more populist tone. The danger, aides said, is that if he were to become identified as an advocate for the banks and Wall Street, people could take out their anger on him.

“The change now is you have a free-floating economic anxiety that has expressed itself in a kind of lashing out at those being bailed out and people who are bailing out,” said Michael Kazin, a professor at Georgetown University who has written on populism. “There’s not really a sense of what the solution is.”

“I do think there’s a potential for a ‘damn everybody in power’ kind of sentiment,” Mr. Kazin said.

Very insightful, don’t you think? Thanks for stating the obvious, Mr. Kazin. We appreciate that.

One Response

Subscribe to comments with RSS.

  1. llabesab said, on March 17, 2009 at 10:03 pm


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: