So President Obama is finally waking up to the damage being done to his credibility and authority by AIG, a company that is for all practical purposes now an arm of the government but whose leaders are acting as if the reverse were true. Obama called the hundreds of millions of dollars in new bonuses an outrage and said he'd do what he could to block the payments.
But this still misses part of the point, and Josh Marshall at Talking Points Memo cut to the heart of why in a piece yesterday:
I don't believe the bonuses themselves are the heart of the matter, nor the fact that they're going to the very executives who caused AIG's implosion or even the galling reality that, since all money is fungible, they're being paid with taxpayer dollars. What's really driving this forward -- and what makes it such a dangerous moment for the White House -- is the jarring image of the administration's impotence.
Secretary Geithner found out about the bonuses. He told AIG CEO Edward Liddy it wouldn't fly. And Liddy, in a curiously imperial letter, tells Geithner that much as he is pained by the situation -- to blow it out his ass. Which he apparently proceeded to do.
Congress, as usual, is merely whining. Here's what it might do: Enact legislation that imposes a 100 percent income tax on bonuses or whatever the financial wizards want to call them at the companies receiving our tax dollars for their, and the economy's, survival. Congress will continue to whine.
I'm still not certain that Obama gets how bad the situation is -- a ward of the state looting the taxpayers' pockets and telling the president to shove it, and, until today, the president and his people meekly saying okay. In less stable nations, revolutions get started with less cause.
The Wall Street crowd -- AIG is hardly the only culprit in looting from the rest of us -- remains deliberately oblivious and supremely arrogant. In less stable nations, this kind of stuff leads to vigilantism.