Nearly perfect pre-dawn run, with the temp at 37 degrees and no wind here in NE Ohio. And when you are on the concrete at 5 a.m. you can rejoice in the fact that you are out of the Internet echo chamber and have some time to think. I was thinking this morning about how difficult it is these days for Obama, members of Congress and others to restore trust and confidence. And I’m convinced that has to happen before we are going to see any lasting economic recovery.
Think about it. The story erupts over the weekend that A.I.G. — ward of the U.S. taxpayer and poster child for just about everything that is wrong with the economy these days — is doling out $165 million in bonuses to the very executives who did the most damage to that company and to the world economy. Woot. And USA Today reports that this latest transfer of wealth is part of a larger payout of around $450 million. Not sure exactly what that means. More to come? Good grief. Keep in mind that Mr. and Ms. U.S. Taxpayer have written bailout checks to A.I.G. in the range of $170 billion.
OK. This gets the juices flowing on the Sunday talk shows — but apparently as it stands now there is no way to block the bonus payments. Here’s from The New York Times this morning:
The list, long sought by lawmakers, was released a day after the disclosure that A.I.G. was paying out hundreds of millions of dollars in bonuses to executives at the A.I.G. division where the company’s crisis originated. That drew anger from Democratic and Republican lawmakers alike on Sunday and left the Obama administration scrambling to distance itself from A.I.G.
“There are a lot of terrible things that have happened in the last 18 months, but what’s happened at A.I.G. is the most outrageous,” Lawrence H. Summers, an economic adviser to President Obama who was Treasury secretary in the Clinton administration, said Sunday on “This Week” on ABC. He said the administration had determined that it could not stop the bonuses.
But some members of Congress expressed outrage over the bonuses. Representative Elijah E. Cummings, a Democrat of Maryland who had demanded more information about the bonuses last December, accused the company’s chief executive, Edward M. Liddy, of rewarding reckless business practices.
“A.I.G. has been trying to play the American people for fools by giving nearly $1 billion in bonuses by the name of retention payments,” Mr. Cummings said on Sunday. “These payments are nothing but a reward for obvious failure, and it is an egregious offense to have the American taxpayers foot the bill.”
An A.I.G. spokeswoman said Sunday that the company would not identify the recipients of these bonuses, citing privacy obligations.
Ah, c’mon A.I.G. spokeswoman. Liar, liar panties on fire. Since the U.S. taxpayers essentially own A.I.G., don’t we have the right to know who we are rewarding for such excellent performance? By the way, how would you like to get up every day and have to be the spokesperson for A.I.G., Citigroup, Bernie Madoff and so on? I digress.
Anyway, the blowhards of the Beltway can huff and puff all they want about these really outrageous bonuses. But here’s the point. Shouldn’t someone at Treasury have known — or at least asked — about these bonuses before handing out billions in bailout cash as recently as a few weeks ago? And if the Treasury folks knew, why didn’t they say something before now? And if they asked A.I.G. management and didn’t get a straight reply, then something is wrong, ethically and maybe criminally.
In any event, the perception is that the public — all of us — have been lied to again. That we are getting our noses rubbed in it. And that’s not going to help Obama restore trust and credibility. I don’t think the American public likes being duped.
Wonder if Jon Stewart could get Edward M. Liddy, A.I.G’s CEO, to visit on The Daily Show. That sure worked out pretty well for Jim Cramer. Oh well.
And an update.
Last week I wrote –“Twittering the News” — about the story that made its way around Twitter and via blogs about The Plain Dealer and other newspapers headlined “The Ten Most Endangered Newspapers in America.” Pretty thin story actually. And later denied by The Plain Dealer. But the story, even in my little world of the Internet, made its way from person to person, site to site — and quickly. And few — including me — bothered to check the story before passing it on. And fewer still — although I did, thankfully — were quick to pass along the reply from The Plain Dealer.
Anyway, Ted Diadiun, the PD’s reader representative, wrote about this situation yesterday. It’s worth reading. It says a lot about journalism and about how we get and distribute information these days.