Sunday, March 22, 2009
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Toxic R Us
By Maureen Dowd
It’s an image that could have come straight out of a McCain campaign ad: Barack Obama growing organic arugula at the White House.
But there was Michelle on Friday, the first day of spring, with a bunch of fifth graders, digging a veggie garden on the South Lawn.
She told The Times there would not be beets, because her husband doesn’t like them, but there would be arugula. And she promised that the entire Obama family, including the president, would go out and pull weeds, “whether they like it or not.”
The tableau of Michelle Obama hoisting a pitchfork on Friday with her sinewy arms and warning that the commander in chief would be commandeered into yard work left me wondering if the wrong Obama is in the Oval.
It’s a time in America’s history where we need less smooth jazz and more martial brass.
Barack Obama prides himself on consensus, soothing warring sides into agreement. But the fury directed at the robber barons by the robbed blind in America has been getting hotter, not cooler. And that’s because the president and his Treasury secretary have been coddling the Wall Street elite, fretting that if they curtail executives’ pay and perks too much, if they make the negotiations with those who siphoned our 401(k)’s too tough, the spoiled Sherman McCoys will run away, the rescue plan will fail and the markets will wither. (Now that Mr. Obama has made $8,605,429 on his books — including $500,000 for letting his memoir be condensed into a kids’ book — maybe he’s lost touch with his hole-in-the-shoe, hole-in-the-Datsun, have-not roots.)
The shafters of the universe have been treated with such kid gloves that they remain obnoxiously oblivious. Vikram “Pandit the Bandit” at Citigroup, which received $50 billion in bailout money, is pulling a Thain, spending $10 million to renovate his Park Avenue offices, complete with a Sub-Zero refrigerator and premium millwork (whatever that is).
Fannie Mae, the mortgage finance behemoth that had $59 billion in losses last year when the government was forced to take it over, and since has asked for $15 billion in taxpayer money, brazenly intends to give $1 million apiece in retention bonuses to four top executives, even though the word retention in a depression is pure Ionesco. Freddie Mac, which has sought $45 billion in aid, has yet to disclose its planned bonuses.
Asked by Jay Leno why our loans to Wall Street haven’t trickled down to Main Street, President Obama conceded that the banks “haven’t started lending it yet.”
Treasury Secretary Tim Geithner, who grew up as a Republican and was head of the New York Fed for five years, sees things from the point of view of that wellspring of masters of the universe, Goldman Sachs. (His Treasury chief of staff was a Goldman lobbyist, who fought then-Senator Obama’s attempt to curb executive compensation — just as Geithner has done within the administration.)
At the New York Fed, Geithner helped preside over the A.I.G. bailout in September. But in October, it was Andrew Cuomo, the New York attorney general, who had to threaten to sue unless A.I.G. canceled $160 million in planned expenses for conferences and a $600 million bonus pool.
Virtually unnoticed amid the bonus imbroglio was A.I.G.’s grudging disclosure that it had funneled $93 billion — more than half its federal money to date — to its high-flying insurees, including Goldman Sachs, Merrill Lynch and a group of European banks.
Goldman Sachs separately got $10 billion in bailout money last year, but recently asserted snootily that it’s doing well enough and doesn’t want our money because of the restrictions attached. Yet as Goldman sneers at the federal money at the front door, it’s taking delivery of billions in no-strings federal money through the back door. Can we taxpayers deduct the difference?
Our gift to Goldman demonstrates why the government’s headless and heedless bailout of A.I.G. is so wrong.
And why are we bailing out foreign banks, including a couple of French ones and UBS, a Swiss bank currently tussling with the I.R.S. because it refuses to hand over the names of thousands of U.S. tax-dodgers?
The issue is how much we must pay to preserve financial stability over all, not how much one company promised to pay. At this point, A.I.G. seems to be the only party paying face value on toxic derivatives.
Ed Liddy was put in charge of an essentially bankrupt company, but he never drove a hard bargain on bonuses or counterparty debts. He honored contracts made by an organization that had become a fraudulent scheme. He could have told the leeches inside the company and out that the world had utterly changed, so the contracts would too — as Michelle would say, “whether they like it or not.”
Used by permission
Posted by Kenneth E. Lamb at 5:11:00 PM