Friday, March 20, 2009

Finding the Hidden News

here's what you will find on page A18 in the NY Times today: Many in Government Knew Weeks Ago About A.I.G. Bonuses
The question was direct and prescient. Representative Joseph Crowley, Democrat of New York, asked theTreasury secretary in an open hearing what could be done to stopAmerican International Group from paying $165 million in bonuses to hundreds of employees in the very unit that had nearly destroyed the company.

Timothy F. Geithner, the Treasury secretary, responded by saying thatexecutive pay in the financial industry had gotten “out of whack” in recent years, and pledged to crack down on exorbitant pay at companies like A.I.G. that were being bailed out with billons of taxpayer dollars.

The exchange took place before the House Ways and Means Committee on March 3 — one week before Mr. Geithner claims he first learned that the failed insurance company was about to pay a round of bonuses that have since caused a political uproar.

It's maybe too obvious to point that if the Indispensable Man were a Republican, he wouldn't be getting the "buried in the back pages" treatment. 

The AIG bonus story is outrageous. It has also been great fun to watch for those of us who were against the bailouts from the beginning. But, it's time to get real. The primary scandal is the huge sums paid out by the gov't with AIG as its conduit. The secondary scandal is the behavior of the political class, which has been engaging in a "shocked! shocked!" routine that is completely bogus. As you can see from the above, the bonuses were widely known and discussed. I have never heard of Congressman Crowley. I assume he has a staff, a basic level of reading comprehension, and a brain. I would assume he didn't just stumble accidentally into this question about AIG bailouts. 

That the Congress and the Obama Administration is now expressing its faux-rage is disingenuous and an insult to the intelligence of their supporters. It's also clear that they know things about the bailouts that are not widely discussed, or even acknowledged, except behind closed doors. You can get away with that if you're talking about national security, but not over the unregulated expenditure of a trillion dollars to the financial sector. The bailouts and their enablers should be the target. Not the stupid bonuses. 

It's time to put away childish distractions and attack the root of this on-going scandal.

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