Tuesday, February 3, 2009

Why take meaningful actions when you can use meaningless words?

Some strong words this weekend from President Obama and Senator Dodd in response to the news that Bank executives receiving bailout money are still handing out massive bonuses:
Following the report that Wall Street firms had handed out $18.4 billion in bonuses last year amid the financial meltdown, Senate Banking Committee Chairman Christopher Dodd (D-Conn.) said he would look for "every possible legal means" to get the money returned.

"I'm going to be urging - in fact not urging, demanding - that the Treasury Department figures out some way to get the money back," Dodd said. "This is unacceptable."
WASHINGTON — President Obama branded Wall Street bankers “shameful” on Thursday for giving themselves nearly $20 billion in bonuses as the economy was deteriorating and the government was spending billions to bail out some of the nation’s most prominent financial institutions.

“That is the height of irresponsibility,” Mr. Obama said. “It is shameful. And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.”
The Democratic leadership may drive me nuts in countless ways, but at least they're predictable. From a post I wrote here two weeks ago:

The following people are no longer allowed to make ANY sort of criticism of the Bailout(TARP) Bill:

President Obama and the following Senators:

Akaka (D-HI)
Alexander (R-TN)
Baucus (D-MT)
Begich (D-AK)
Biden (D-DE)
Bingaman (D-NM)
Boxer (D-CA)
Burris (D-IL)
Byrd (D-WV)
Cardin (D-MD)
Carper (D-DE)
Casey (D-PA)
Clinton (D-NY)
Conrad (D-ND)
Dodd (D-CT)
Durbin (D-IL)
Feinstein (D-CA)
Gregg (R-NH)
Hagan (D-NC)
Harkin (D-IA)
Inouye (D-HI)
Johnson (D-SD)
Kerry (D-MA)
Klobuchar (D-MN)
Kohl (D-WI)
Kyl (R-AZ)
Landrieu (D-LA)
Lautenberg (D-NJ)
Leahy (D-VT)
Levin (D-MI)
Lieberman (ID-CT)
Lugar (R-IN)
McCaskill (D-MO)
Menendez (D-NJ)
Merkley (D-OR)
Mikulski (D-MD)
Murray (D-WA)
Nelson (D-FL)
Pryor (D-AR)
Reed (D-RI)
Reid (D-NV)
Rockefeller (D-WV)
Salazar (D-CO)
Schumer (D-NY)
Snowe (R-ME)
Stabenow (D-MI)
Udall (D-CO)
Udall (D-NM)
Voinovich (R-OH)
Warner (D-VA)
Webb (D-VA)
Whitehouse (D-RI)

No complaints about oversight, because you didn't add any meaningful oversight provisions to the bill.

No complaints that the banks aren't lending money, because you didn't mandate that in the bill.

No complaints that the banks are still paying executive bonuses, because you chose not to make those provisions enforceable.

No complaints that you didn't see this coming, because you had 3 months to hold hearings and see first hand why the first 350 Billion dollar TARP bill was an extremely flawed bill.
To be perfectly honest I figured they'd wait a little longer than 2 weeks, you know, in order to not completely insult our intelligence.

While you definitely expect it from Dodd, seeing Obama get a case of Pelosi Syndrome is fairly infuriating. Not only could they have put these provisions into the original TARP bill, but as Chris Bowers points out, they still have the power to change this crap:
However, here is what you didn't hear from either President Obama or Senator Dodd as they blasted the bonuses: legislation they are blocking makes it possible to retroactively strip those bonuses. Two weeks ago, the House passed legislation, Finance Chair Barney Frank's HR 384, which retroactively strips recipients of bailout money from receiving bonuses (more in the extended entry):
Emhpasis mine:
[HR 384] Adds the stricter executive compensation limits from the auto bailout bill to firms that receive TARP money. The stricter limits include a ban on bonuses and incentives for to the 25 most highly compensated employees of a company, "any compensation plan that would encourage manipulation of such institution's reported earnings to enhance the compensation of any of its employees," and a mandate to divest in private airplanes. Notably, these stricter limits would apply retroactively to executives from companies that have already received TARP money.

This legislation was passed by the House only eight days ago, over the objections of all but 18 House Republicans. It is still be possible for Senate Democrats to pass a mirror to HR 384, and send it to President Obama's desk. In fact, such a bill would have to first be passed through the Banking Committee, chaired by Senator Dodd. Further, if Democratic Senators were urged to pass this legislation by the Obama administration, it is likely that such legislation could be passed next week, given the massive influence President Obama has with Senate Democrats. And then, poof, the excesses of the bonuses would be solved.

However, as reported on multiple occasions on Open Left, this simply isn't happening. Instead of passing this law, and stopping the bonuses, Senator Dodd and White House NEC chair Larry Summers simply exchanged letters of assurance. They could have stripped these bonuses, but they themselves chose not to do so.
If you don't support meaningful regulations on the TARP money, that's one thing. I can probably guess the asshole in your administration who told you this was good idea. But grandstanding about how "shameful" these bonuses are while blocking the legislation that would regulate them is just too much to take.

Stop it. Now.

Update: Obama mentions today that he will tackle the issue of executive pay in his plan for the rest of the bailout money. While this is a good sign, but there are still plenty of questions that need to be answered. First off, why would he oppose Frank's bill? His bill isn't that radical, and essentially legislates what Obama's been saying about the problems of the bailout. And who will control this oversight committee? If the names Summers or Geithner are anywhere involved, I'm not getting my hopes up.

The house is doing it's job here, and is giving the money for the second TARP with strings attached. I'm sure Obama would rather not have conditions on the money, and create the oversight framework himself, but that's not how our government works. And frankly I'd feel a lot more comfortable with Summers and Geithner working under some restrictions than having them make it up as they go along(a la Geithner and the Citigroup bailout).

Given their track record on these things, I'm pretty sure they've lost the benefit of the doubt.

In addition to the news of the potential executive oversight, the article was notable for including what has to be one of the dumbest things ever said by a US Senator:
In the Senate, Republican leader Mitch McConnell, R-Ky., urged the administration to proceed with caution. "I think we're all appalled by these _ some of these executive salary arrangements and bonus arrangements and perks and all the rest," he said. "On the other hand, I really don't want the government to take over these businesses and start telling them everything about what they can do. Then you truly have nationalized the business.
(Head Explodes)

1 comment:

  1. hahahahha "Pelosi Syndrome." Theres a joke somewhere in there with democratic voters and stockholm syndrome, but i'm not going to take the time to write it out.