Because they voted against taxing the AIG bonuses, and they are among the most right wing Democrats in the house of representatives:
Challengers, start your engines, you have an issue that they won’t be able to avoid.
Well, I suppose that it’s an improvement that we now have people in cabinet positions who, when caught in a bald faced lie, will, when absolutely forced to, tell the truth.
Compared to Dick Cheney, or Alberto Gonzalez, the fact that Timothy Geithner is now admitting that it was the Treasury that demanded the bonus loophole is a step forward.
Of course, this followed 24 hours of “pin the bonus on Chris Dodd,” and only when people went back to contemporaneous news reports, and his fellow senators pushed back against the smear, did they change their tune, but considering the fact that Ari Fleischer accused Saddam Hussein of planning 911 just 6 days ago, this is a step forward, but still, Geithner needs to realize that he works for Barack Obama, who works for us, and not the banks.
Just over half of the ‘Phants voted against it, and all but 6 Democrats (I’ll post who and what should be done later) voted for a 90% tax on bonuses of companies getting bailed out by the government.
On some level I understand just how this is really a very small part of the bailout, but from news, to outrage, to bill passing the house is about 4 days, and it means something, though I’m not sure who gets that yet.
Captured on my cell phone camera from work:
I think that Geithner will be gone by June….He should have rented a house, because we now have a report that Treasury was informed of the bonuses two weeks before Geithner says that he knew, which makes him either a liar, or incompetent.
Me, I’ll go with liar, as it is clear that the Obama administration is lying their asses off about Dodd’s role in proposed bonus restrictions in the bailout legislation, and the logical people lying about it right now are all on the Geithner/Summers “axis of weasels”:
After the recent furor relating to the AIG payments, lawmakers returned to make a forensic examination of the provision seeking to assign blame for what some called a secret agreement to spare the tottering insurance giant, which has received more than $170 billion in federal aid. The provision and its genesis consumed Capital Hill Wednesday.
“The president goes out and says this is not acceptable and then some backroom deal gets cut to let these things get paid out anyway,” said Sen. Ron Wyden, (D., Ore.), author of an earlier, alternative pay amendment, told the Associated Press.
The Obama administration had not tried to hide its concern about the moves to clamp down on executive compensation. Both Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers lobbied Mr. Dodd to make changes.
Administration officials said the Treasury didn’t suggest any language or say how the amendment should be changed. They said they noted legal issues that could likely lead to challenges, but was the end of their involvement. The official said Mr. Dodd and Congress made the final changes on their own.
At issue were competing provisions in the stimulus bill that capped executive compensation for recipients of bailout funds. One, drafted by Sens. Wyden and Olympia J. Snowe (R, Maine), would have capped bonuses at $100,000, retroactive to 2008. Companies awarding bonuses above that level would face the choice of returning those funds to the Treasury or having them taxed at 35%.
“Administration Officials” means someone under Geithner’s or Summers’ control here.
What’s more, the rest of the world does not have any confidence in Geithner either, as evidenced by the IMF criticizing his plan as “lacking detail.”
The IMF never criticizes a Secretary of the Treasury, and the fact that they are now indicates that there are a number of foreign nations that are sick of him, and signed off on this statement.
We need someone who will hold the financial industry to account, and Geithner still has knee pads on.
Nemo at Self Evident makes a convincing case that Bernanke and Geithner are not doing anything but trying to protect the incumbent banking giants.
I agree. While we need a functioning credit system, there is no need for the current banks to continue to exist in their current form, and the Fed and Treasury’s frantic effort to keep these banks on life support is a detriment to the rest of the economy:
If I were in charge and I wanted to prevent banks from failing at all costs, what might I do?
I might relax mark-to-market accounting. This would allow assets to be carried at inflated valuations, both for purposes of regulatory capital requirements and for purposes of getting loans from the Fed.
I might provide non-recourse loans to private equity to create inflated marks where mark-to-market still applies.
I might try to convince the FDIC to exercise forbearance in seizing banks. Of course, the primary day-to-day mission of the folks at FDIC is to preserve the integrity of their insurance fund. So they might object to my suggestion. I might have to give them assurances that they will have the necessary resources should my great plan fail. A $500 billion credit line from the Treasury, say.
If the FDIC agreed, they might suddenly go from 3-4 bank seizures per week to 0-1 per week.
Once my plan leaked to certain troubled banks, they might suddenly halt their attempts to raise capital at $0.20/share.
And of course, once Wall Street got wind of it, shares in financial companies would rocket higher.
Let me know if you notice anything like this happening.
Good point, and good snark.
It looks like Citi Chief Executive Officer Vikram Pandit and his merry band of stupids have decided to spend $10 million on redecorating their executive digs.
Hello, this is a clue!!!! Do you remember the name John Thain, the former head of Merrill until his gold plated office spending came out?
In this case, it’s the Federal Aviation Administration, which has a proposed rule to block public access to raw bird strike data:
The FAA says requests for data from the public “have typically been for specific data fields, individual airports or detailed portions of the database” and that responses from the agency “have addressed each request individually and adequately”.
However, the agency cautions public analysis of bits and pieces of the data could lead to inaccurate portrayals of airports and airlines, which could have a negative impact on their participation in reporting bird strikes.
So, they are saying that think that ordinary people are too stupid to understand the data.
More likely, they are covering something up, like certain airports being having a lot more problems with bird strikes, and the FAA, which is tasked with both regulating and promoting aviation, finds this information inconvenient.
Thursday is new jobless day, and the numbers suck with new claims falling to a still very high 646,000 and continuing claims hitting a new record of 5.47 million, which is a new record….Again.
This implies that people are still unable to find jobs, but, for a while, at least, employers have run out of people to lay off….Delightful.
We also had the Leading Economic Indicators falling, though not as badly as the consensus prediction, and the Philadelphia Fed Business Outlook Survey for March remained awful, from -41.3 in February to -35.0 this month, so we are still seeing a contraction.
In the auto industry, the bailout has been extended to parts suppliers, to the tune of %5 billion.
In real estate, it looks like Moody’s might cut the ratings on some $241 billion of debt for jumbo mortgages, which means that it must suck to live in a high cost real estate area right now.
In the world of the here and now, Moody’s did downgrade insurance company Prudential, and I’m wondering how long before the rest of the insurance industry looks like AIG.
In any case, it appears that the Fed’s decision to start quantitative easing (printing money) is having an effect, with the cost of borrowing falling, with 30-year fixed mortgages falling to 4.98%.
The Fed has also driven the US dollar lower, with the dollar hitting $1.36:€1.00 for the first time since January.
We are also hearing rumors that Citi is considering a reverse stock split, my guess is that this is how they want to address the worry that they might become a penny stock.
In energy, oil broke $50/bbl for the first time this year, on the falling dollar and reports that OPEC members are more-or-less keeping to their quotas.
In a completely heterosexual kind of way, as the General would say.
In any case, the distinguished gentleman from Massachusetts asks, “Is There an Antidote to the Republican Amnesia?“
Memory eventually fails us all, but apparently the decline strikes one party far more than the other.
In recent weeks, my friends across the aisle have expended a lot of breath proclaiming that the Democrats caused the present financial crisis by failing to pass legislation to regulate financial services companies in the years 1995 through 2006.
There is only small one problem with this story — throughout this entire period the Republicans were in complete charge of the House and for the most critical years they controlled the House, the Senate, and the Presidency.
In the House of Representatives, the majority party has almost unlimited power over the minority party. The majority party owns the committee chairmanships; it controls what bills come to a vote; and it is under no obligation to consider the ideas of the beleaguered minority. When the Republicans were in the majority they ruled with an iron first; it is no accident that Tom DeLay was known as “The Hammer.”
That is why I find it particularly flattering the Republicans now claim that in the years 1995 to 2006 I personally possessed supernatural powers which enabled me to force mighty Republican leaders to do my bidding. Choose your comic book hero — I was all of them.
…..
Brutal and very funny.
And both Rahm Emanuel and David Axelrod are now saying that the AIG bonus fiasco doesn’t matter, and that the people don’t care about it.
In the grand scheme of the bailout, it’s not a lot of money, I get that, but to suggest that this is some sort of silly, media generated phony story is simply naive and stupid.
When did the Carter administration come back?
So, they are trading off return for the ability to get themselves out in relatively short order, or as the Asia Times puts it, “China inoculates itself against dollar collapse.”
My take is that this may be the economic story that comes from “nowhere” to bite us in the butt in the next 18 months or so, but my predictive skilz suck, so YMMV.
It turns out that her husband, John Coale, is Palin’s husband is a senior figure in Sarah Pac:
Ironically, just last week, Van Susteren decried people thinking she’s “so close to the Palin family.” “The only way that I’ve met them is by interviewing them,” she said, never mentioning her husband’s relationship to Palin.
So not surprised.
If I’m reading Michael Hirsh right, the non financial products division part of AIG, the part that was supposed to be the well run real insurance company, may very well be insolvent too:
Thomas Gober, a former Mississippi state insurance examiner who has tracked fraud in the industry for 23 years and served previously as a consultant to the FBI and the Department of Justice, says he believes AIG’s supposedly solvent insurance business may be at least as troubled as its reckless financial-products unit. Far from being “healthy,” as state insurance regulators, ratings agencies and other experts have repeatedly described the insurance side, Gober calls it “a house of cards.” Citing numerous documents he has obtained from state insurance regulators and obscure data buried in AIG’s own 300-page annual reports, Gober argues that AIG’s 71 interlocking domestic U.S. insurance subsidiaries are in hock to each other to an astonishing degree.
Seriously, we need to start sending people to jail.
Word is that Congresswoman Ellen Tauscher has been tapped as undersecretary of state for arms control and international security, which means that the head of the New Democrat Caucus, and a shill for the banking industry would be replaced in a special election.
The fact that this DINO in a safe Dem district would be out would be a very good thing.
Yeah, it does seem to be the day for dead pools.
In this case, we have AIG CEO saying tat Fed Chairman Bernanke and dhe Federal Reserve approved the bonuses some months ago.
While Bernanke is unfirable, I think that this is another nail in his reputation, and I think that we will start seeing increasing pressure for him to resign.
Well, notwithstanding the obvious, that Geithner is unwilling to do the tough things, and that he keeps coming back to the bad bank, but it may very well be the AIG bonus fiasco that does him in.
Ignoring the fact that Geithner was at the center of the first AIG bailout, we are now seeing the signs of panics with Treasury department pointing the finger at Senator Chris Dodd, despite the fact that it was Treasury Secretary Timothy Geithner and Lawrence Summers who waged all out war against meaningful regulation of executive bonuses, and Dodd proposed strong regulations against excessive bonuses:
(4) a prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period that the obligation is outstanding to at least the 25 most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient;
What’s more, we are now seeing that the Washington Post editorial page, in the person of Harold Meyerson is now calling Geithner the bank’s bitch:
But Geithner’s indulgence of bankers’ indulgences is fast becoming the Obama administration’s Achilles’ heel. The AIG debacle is the latest in a series of bewildering Geithner decisions that threaten to undermine the administration’s efforts to restart the economy. So long as it’s Be Kind to Bankers Week at Treasury — and we’ve had eight straight such weeks since the president was inaugurated — American banking, and the economy it is supposed to serve, will remain paralyzed. The Geithner plan to restart the banks provides huge taxpayer subsidies to hedge funds, investment banks and private equity companies to buy the banks’ toxic assets without really having to assume the risk. That’s right — the same Wall Street wizards who got us into this mess, using the same securitization techniques that built mountains of debt within a shadow financial system that remains unregulated, are the saviors whom Geithner has anointed to extricate us — with our capital, not theirs — from the mess that they created.
It isn’t entirely fair: It was clear that this is what Timothy Geithner was when Obama first nominated him, so it is fair to say that Geithner’s policies are Obama’s policies.
One hopes that Obama dumps the policy, and Geithner (and Summers) shortly.
In the meantime, the Republicans are pulling their knives out with Representative Connie Mack (R-FL) and House Minority Leader John Boehner (R-OH) are directly or indirectly calling for Geithner’s ouster.
I can’t believe that I am saying this, but Obama should listen to them.
Al Franken has filed paperwork with the election court for the Coleman campaign to reimburse them for court costs.
Seeing how Coleman has raised more money for his court challenge than he did for his campaign, I would really like to see the smarmy bastard soaked.
So, we saw a
0.4% increase in the consumer price index in February, which is the highest rate since July, even if that is just a 5% rate.
Truth be told, I’m not sure if this is good news, reduced possibility of inflation, or a sign that the dollars that are flooding our economy are creating an inflation spiral.
In either case, we have another indicator that the real estate market is no where near a turn around, the bump in February building permits not withstandint: the Architecture Billings Index remains near a record low, and this is a leading indicator.
The spike in jump in mortgage applications does not really mean much, as it is primarily refi activity driven by low mortgage rates.
Internationally, we have a number of developments:
In energy, oil fell on the pessimistic report from the Federal reserve despite assurances of the House of Saud that OPEC will really follow the quota this time….really…for sure. (I don’t believe it either)
Finally, the news that the Fed is printing about a trillion more dollars pushed the dollar down.
At least that’s how I read their purchasing government debt and more mortgage backed securities: Printing money, about $1 trillion.
The markets appear to be loving this, but I’m more concerned about how gloomy the normally excessively cheerful Bernanke Fed is, in the first ‘graph.
Full Fed statement:
Release Date: March 18, 2009
For immediate releaseInformation received since the Federal Open Market Committee met in January indicates that the economy continues to contract. Job losses, declining equity and housing wealth, and tight credit conditions have weighed on consumer sentiment and spending. Weaker sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories and fixed investment. U.S. exports have slumped as a number of major trading partners have also fallen into recession. Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.
In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion. Moreover, to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months. The Federal Reserve has launched the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses and anticipates that the range of eligible collateral for this facility is likely to be expanded to include other financial assets. The Committee will continue to carefully monitor the size and composition of the Federal Reserve’s balance sheet in light of evolving financial and economic developments.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.