Thursday, March 19, 2009

The Fed, Treasury bumbling idiots

I don't care how good or bad the news is, the Obama Administration should have been kept abreast of every step of the bonus fiasco that is brewing about AIG.

The gasbags on morning joke continues fake outrage, well they do that every morning, but one thing I do agree with is this, the Obama Administration knew by late last week about these bonuses and the pounding of AIG by the Sunday morning talk shows was in full force. Now the public is weeding through the when, who, and how the administration knew about these outrageous payments.

We can point fingers all day long, but it comes down to this, Timothy Geithner, Treasury Secretary failed in halting these bonuses, period. He knew about the bonuses and could not stop AIG from cutting the checks and issuing the checks by Friday.

The U.S. public owns 80% of AIG, which started to get major money pumped to them from the Bush Administration to stay afloat. Some hard decisions needs to be made about this company. Starting with the takeover from the U.S. government, the firing of management, the total shut down of that products division which put this company where it is at now to restore some confidence in management of this administration.

There is no way that a private company, taking public money, propped up by us, the taxpayers, and we, the taxpayers can not tell AIG where the wind blows?

Geithner is a smart guy, we know this, but is he the right guy for this job? Right now, NO.

As pressure mounted on AIG employees to return the bonuses, new details emerged yesterday about what the Fed, the Treasury Department and the White House knew regarding the payments and when. AIG executives said the Fed was informed three months ago by the company that it would pay $165 million by March 15 to employees working at its most troubled division. The Treasury and White House said they learned of the payments from Fed officials only days before they were due.

Close coordination between the Fed and the administration is now more important than ever as they near the launch of two signature programs to rescue the financial system, which together could reach $2 trillion and are aimed at reviving consumer lending and purchasing soured assets and loans from ailing banks.

Treasury Secretary Timothy F. Geithner, a central figure in the decision to bail out AIG last fall as president of the Federal Reserve Bank of New York, said in an interview yesterday that he had not been aware of the size of the bonuses and the timing of the payments.

"I was stunned when I learned how bad this was on Tuesday [March 10]," Geithner said. "I shouldn't have been in that position, but it's my responsibility and I accept that."

Two days later, Geithner told the White House. The last-minute disclosure irked some of the president's senior advisers, but they refuse to point fingers now, saying the timing had little impact on the outcome or the president's public statements this week.

"Would I have liked an earlier warning system on this? Yeah," said David Axelrod, a senior White House adviser. "Would it have markedly changed things? Probably not. The legal constraints are the legal constraints."


Democrats and Republicans in Congress are increasingly questioning how Geithner could not have known about the bonuses, given his past role in AIG's bailout, which has totaled more than $170 billion.

"I'm sick and tired of hearing the administration and the Secretary of the Treasury say, 'I just found out about it,' " Rep. Paul E. Kanjorski (D-Pa.) said yesterday.

The shitty thing about all of this is that those making these decisions are the same players, mostly, who was for deregulation, crafted the deals that have come back to bite this administration in the "you know where" and comes up with this lame excuse that "we can't renegotiate these contracts". I am sorry but it smells of bullshit. If the auto industry can renegotiate, you mean to tell me the United States of America who OWNS 80% of AIG can not drag their asses to the table to do the same? It doesn't wash.

The Obama Administration needs to clean this up and I mean, yesterday. They deserve the criticism that they are getting right now and I don't think most will disagree. This is absolutely the opposite of what Obama campaign for since 2007. But there is something about Washington, D.C., where these folks get into a room, craft legislation, and somehow for the good of the people always fall short.

Obama Administration, clean it up, even if it means performing sweepers for a new Treasury Secretary.


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