Shades of Gray

AIG Outrage: The D.C. Magic Trick

Posted in Bailout, D.C., Washington by Wayland Abernathy III on March 18, 2009

Are you still wondering if Washington is lying to you about this bailout ‘crisis’ regarding AIG? You’ll get it eventually. I’m simply here to help you along on your ‘quest for the truth.’

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Barney Frank – Crusader for Justice?

Posted in Bailout, Barney Frank by Wayland Abernathy III on March 17, 2009

I threw up in my mouth a little when I read this:

Representative Barney Frank, the Democratic chairman of the House Financial Services committee, kicked off what’s likely to be a loud refrain this week on Capitol Hill, when he aimed fire this morning at American International Group for the bonuses it doled out to employees at the same time it has been propped up by hundreds of billions of dollars in bailout money. Mr. Frank’s remarks followed a torrent of criticism this past weekend from Obama administration officials, who had demanded that A.I.G. should renegotiate the packages totaling hundreds of millions of dollars.

“Clearly not enough was done in the beginning to put conditions on A.I.G.,” Mr. Frank said in an interview on NBC’s “Today” show. While he said he wanted to review whether A.I.G. was contractually obligated to pay out the bonuses, as it contended, he also questioned whether the recipients of the money should remain employed.

See, after I washed out my mouth with some Dr. Pepper, I had to double check to make sure Mr. Frank was actually speaking and didn’t have someone’s hand up his butt doing the speaking for him. To my dismay, I did not see anyone from Jim Henson’s Muppet’s near the scene of this crime. He really did say this.

Amazing, isn’t it? Unfortunately, this is quickly turning into a case study of the arrogance of our Congress. Harsh words? Nope – read on:

“These people may have a right to their bonuses, they don’t have a right to their jobs forever,” Mr. Frank said, charging that the bonuses amounted to rewards for incompetence. And he added: “These bonuses are going to people who screwed this up enormously.”

Does he not see that the trail of breadcrumbs leads to his office door? I can dream that Mr. Frank was speaking about Congress, right? A perfect example of a Freudian slip? This is better described as a nightmare. I hope I wake up soon.

The rest of the article alludes to more ineffectual, time-wasting solutions that Captain Barney will provide. Oh, joy.

Mr. Frank was quick to point out that before Congress acted on a bailout package last fall, the Federal Reserve began helping to bail out A.I.G. Oversight by the Fed, he added, represented authority granted back in the 1930s and needed to be examined thoroughly.

A.I.G.’s actions are no doubt adding to what The Times’s Adam Nagourney analyzed today as a rising current of populist backlash that could complicate efforts by the administration and Congress to restore confidence in the economy.

According to The Times’s Ed Andrews and Peter Baker, the bonus schedule was established before A.I.G. received $170 billion in taxpayer bailout money:

The retention plan also calls for another $230 million in bonuses for 2009 that are due to be paid by March 2010. Combined with the 2008 bonuses, that would bring the total retention pay for financial products executives to $450 million. But in response to pressure from Treasury Secretary Timothy F. Geithner, A.I.G. agreed to reduce its 2009 bonuses for the financial products unit by 30 percent.

The bonus plan established for the financial products unit before the federal government stepped in called for $220 million in retention pay for 400 employees for 2008. About $55 million of that was paid in December and the remaining $165 million was paid on Friday.

See now, doesn’t that make you feel tingly all over? Captain Barney is here to protect us from the evil corporate thieves.

Who will protect us from Barney and the thieves sitting next to him?