Slow Walking Over The Cliff
by digby
I was just reading this interesting piece about narcissistic personality disorder and musing about the mindset that believes it's ok to take down the world economy and then dictate the rules by which it is fixed.(Not to mention turn a profit at it!) And then I read this:
In recent days, in spite of public furor over huge bonuses paid at American International Group Inc., the administration has concluded that it needs the private sector to play a central role in fixing the economy. So over the weekend, the White House worked to tone down its Wall Street bashing and to win support from top bankers for the bailout plan announced Monday, which will rely on public-private investments to soak up toxic assets.
But weeks of searing criticism by politicians and the public had left bankers leery of working with the government. After brainstorming about what to do about that problem, the White House resolved to try to take control of the debate, according to several administration officials. In weekend television appearances, President Barack Obama and other administration officials tempered their criticisms of the financial sector.
President Obama met with members of the National Conference of State Legislature at the White House speaking adamantly about how his $787 billion dollar bailout must be used wisely and that wasteful spending will be avoided. Video courtesy of Fox News.
Meanwhile, Treasury Secretary Timothy Geithner and his colleagues worked the phones to try to line up support on Wall Street for the plan announced Monday. They told executives they don't favor using the tax code to retroactively penalize specific individuals who had received bonuses, according to people familiar with the calls. They asked officials to sign on "in pencil, not ink," and to "validate" or "express support" for the plan, these people say.
Some bankers say they turned the conversations into complaints about the antibonus crusade consuming Capitol Hill. Some have begun "slow-walking" the information previously sought by Treasury for stress-testing financial institutions, three bankers say, and considered seeking capital from hedge funds and private-equity funds so they could return federal bailout money, thereby escaping federal restrictions.
Well that certainly clearsthis up:
“It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger,” President Obama said on Thursday of the banks he’s chosen to bail out. “You don’t want them to blow up. But you’ve got to kind of talk [to] them, ease that finger off the trigger.”
No kidding. Reading that WSJ article, I can't help but be reminded of another president who was shown in no uncertain terms who was really running the show:
Clinton's experience shows what such pressure can do to a president's agenda. Promises of spending on education, public works and a middle-class tax cut fell by the wayside as advisers led by Robert Rubin, who later became Treasury secretary, convinced the new president the best thing he could do for the economy was to show investors his resolve on fiscal discipline.
``You mean to tell me that the success of the economic program and my re-election hinges on the Federal Reserve and a bunch of fucking bond traders?'' Clinton raged at aides, according to journalist Bob Woodward's book, ``The Agenda.''
As it was then, so it is now. (And you can bet that the fucking bond traders are getting ready to strap on the IED over health care and energy...) The owners of America will be appeased or they will destroy everything in their wake. In another world, they would call this economic terrorism.
I am not averse to Wall Street making money. It's capitalism and god bless them for it. But this is a crisis. But these people is so arrogantly grasping that it defies reason. But then this isn't a rational situation. They are telling the US Government to sit down and shut up --- and getting away with it:
Despite the public outcry over $165 million in bonuses awarded at troubled insurer AIG, Senate Majority Leader Harry Reid (D-Nev.) showed little inclination Monday to bring the explosive issue to the floor this week or next. Instead, Reid is likely to delay action on executive compensation until late April, after the Senate returns from a two-week recess starting April 4.
The lack of enthusiasm to expedite the bonus legislation comes after Obama said over the weekend that he didn’t think it was a good idea for Congress to target individuals with tax proposals.
“As a general proposition, I think you certainly don’t want to use the tax code … to punish people,” Obama said in the interview with “60 Minutes” that aired Sunday.
Reacting to a frenzy of media coverage, the House last week passed a measure that would levy a 90 percent tax on bonuses received this year by executives at AIG and other companies collecting more than $5 billion in federal aid.
Senate Finance Committee Chairman Max Baucus (D-Mont.) last week introduced a less stringent proposal that would impose a 35 percent tax on bonuses. Both employers giving bonuses and executives who receive them would pay.
But even this modified proposal is being placed on the backburner.
Reid told colleagues that they would spend this week instead debating legislation to promote national service and volunteering, a process that could last well into the weekend.
"Nice little country you have here, be a shame if anything happened to it."
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