cosmic poaching

Thank goodness President Obama’s first 100 days are over. They’re totally irrelevant. He’s only a politician. That means he’s beholden to his campaign contributors and not constituents – just like every other politician. And his actions, or inaction, prove that.

There are probably at least two-dozen AIG employees, if not more, who should be going to jail. AIG went from a respectable company to one that devised a “scheme that smacks of securities fraud” according to What Cooked the World’s Economy? It Wasn’t Your Overdue Mortgage – The Village Voice, 1-27-09. The article points out how AIG’s Financial Products unit wrote credit derivatives policies (insurance policies for investors) that AIG didn’t have the money to cover. And to get around those pesky American insurance reserve requirements AIG moved its Financial Products group to London.

Time Magazine reported that during a March 2009 press conference, while discussing the AIG fiasco, President Obama “did not seem that into it, a surprising misfire for a politician who has long excelled at striking the right tone at public appearances. He was almost grinning as he described the “recklessness and greed” of the traders in AIG’s financial-products division.” (See Obama’s AIG Outrage: All Talk, No Action – Time 3-17-09). The article also notes Obama asked rhetorically “How do they justify this outrage?” but with “only the slightest tinge of outrage in his own voice.”

Populist outrage soared when it was revealed AIG executives, who drove the company into the ground resulting in a taxpayer bailout of nearly $180 billion, would be receiving millions of dollars in retention bonuses.

Obama then asked Treasury Secretary Timothy Geithner to “pursue every single legal avenue to block these bonuses and make the American taxpayers whole.” (See Obama Rips AIG Bonuses – CBS News 3-16-09)

But when the House voted to slap a 90% surtax on bonuses granted to employees who earn more than $250,000 at companies that have received at least $5 billion from the government’s financial rescue program Obama (along with the Senate) struck a different note.

According to Is that 90% Tax on AIG Bonuses Dead? (CBS News 3-23-09) Obama, when asked for his perspective on the tax as a former Constitutional law professor, is quoted from a 60 Minutes interview as saying “as a general proposition, you don’t want to be passing laws that are just targeting a handful of individuals… I think you certainly don’t want to use the tax code to punish people.” (Also see Senate Stalls Vote to Tax AIG Bonuses – The Arizona Republic 3-24-09)

Obama adds it doesn’t make sense for the AIG executives to get bonuses but says ”the flip side is that Main Street has to understand, unless we get these banks moving again, then we can’t get this economy to recover.”

The President sure knows a thing or two about how money gets things moving. According to the Center for Responsive Politics Obama is fourth on the list of accepting campaign contributions from AIG, with a haul of $110,332 (this number, and the following figures, are from 1989 to 2008). At the top of the list is Senator Christopher Dodd (D-Conn., and chairman of the Senate Banking Committee), who accepted $281,038 from AIG in campaign money. Right behind him is George W. Bush at $200,560. Number three is Senator Charles Schumer (D-NY) with $111,875 and fifth on the list is Senator John McCain (R-AZ) with $99,249 of largesse.

Sadly, the AIG executives got their bonuses after Obama backed down and the Senate did nothing to prevent these shameful payouts (see Senate Stalls Vote to Tax AIG Bonuses – The Arizona Republic 3-24-09)

As for more inaction on the President’s part because of his hands being tied by campaign contributions, As Foreclosures Surge… (NY Times op-ed 5-4-09) points out Obama did nothing as “12 Senate Democrats joined 39 Senate Republicans to block a vote on an amendment that would have allowed bankruptcy judges to modify troubled mortgages.”

The NY Times notes Senator Obama campaigned on this provision but when it came time “to stand up to the banking lobbies and cajole yes votes from reluctant senators – the White House didn’t. When the measure failed, there wasn’t even a statement of regret.”

Senator Obama also campaigned on a platform of change. But since he also accepted $6 million in campaign contributions from investment and securities companies (It’s the Deregulation, Stupid – Mother Jones 3-28-08) I don’t see how he can really change much.

This entry was posted on May 17, 2009 at 3:21 am and is filed under Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.