President Obama, along with everyone else, is angry about the $165 million in bonuses that AIG handed out to the very executives responsible for the insurance giant’s collapse. He may not be as fired up as Senator Grassley of Iowa, who suggested AIG executives commit ritualistic suicide, but, of course, Obama doesn’t think those bonuses are fair or just. The problem is that he really can’t do much about it (nor, Andrew Ross Sorkin argues, should we try to). Despite directing the Treasury Department yesterday to do everything possible to block the bonuses, the White House admitted soon after that doing so would be far more costly, and they would instead seek to leverage the $30 billion they’ve yet to hand over to AIG to recoup the cost of the bonuses and reign in executive compensation. But despite those efforts, doing “the best we can” won’t quell popular resentment, and could potentially tie Obama’s hands going forward as he continues to try to salvage the financial system and push his vast agenda.
• Michael D. Shear and Paul Kane say that Obama’s “inability to block executive bonuses at insurance giant AIG … is threatening to derail both public and congressional support for his ambitious political agenda.” The bonuses have “quickly undermined whatever political capital Obama has earned with his past efforts” at limiting executive compensation. [WP]
• Rick Klein says that the danger for Obama “is that his administration suddenly looks just like President Bush’s: at best, playing sideline critic as Wall Street gets its money — and public outrage boils.” And furthermore, in this environment it’s almost impossible to imagine him “getting another set of cash set aside to bail out big banks.” Or, “How about another stimulus package? How about his budget? And healthcare and cap-and-trade and education reform?” [Note/ABC News]
• Eamon Javes, Victoria McGrane, and Lisa Lerer believe “AIG’s woes threaten to severely complicate Obama’s hopes of returning to the well — again — for more bailout cash. His administration has already hinted at another $750 billion in bailout funds, but public opinion and congressional resistance will make that a tough sell.” If people begin to “sense that Obama didn’t wisely manage the AIG bailout,” it could “sap his credibility as he continues to try to manage the economy.” [Politico]
• A.B. Stoddard too believes that the bonus scandal “surely will complicate the president’s very complicated agenda.” What he needs to do now is “make his case to the American public. He is a great communicator, and he has the ability to tell us why he decided recently to bail out AIG again and why bolstering numerous banks may be the only way our economy can hope to come back. The longer he waits, the harder it will be, and the less believable he will sound.” [Pundit’s Blog/Hill]
• Marc Ambinder writes that the Obama administration believes “that the public will blame the government for failing to ameliorate this political inequality.” And while Obama may well find a loophole to recoup the bonuses, it will be “the power of Obama’s words” that “will probably force AIG to reconsider its position. The sunburst effect of presidential shame works when it is judiciously applied.” [Atlantic]
• Matt Miller, likewise, suggests that Obama “just ask the executives in question — including seven who are apparently slated for more than $3 million each — to voluntarily forgo these bonuses” as a patriotic act in a time of crisis. And if they don’t, “he will publish the names and bonus amounts of all who choose to take this loot, so that the public, and these executives’ peers and neighbors, will know the choice they made.” [Daily Beast]
• Chuck Todd and friends wonder if Obama will “actually have to calm people down,” considering the “lynch mob” forming for AIG. Which is ironic because “the $165 million in bonuses represent just 1% of the government money AIG has received.” [First Read/MSNBC]
• Rich Lowry thinks it’s “fine” for Obama to “try to block the bonuses,” but where do we go to get back “the other $169.835 billion” that we’ve given to AIG in government bailouts? [National Review]
• Jonathan Weisman, Sudeep Reddy, and Liam Pleven say that Obama’s bind is that “[h]e needs to convince Americans he shares their mounting fury over the hundreds of billions of taxpayer dollars being pumped into companies like AIG. At the same time, he needs the executives and employees of those companies to help the government untangle the current financial mess.” [WSJ]
• The New York Times editorial board thinks “Obama was right to acknowledge that outrage on Monday, when he vowed to try to stop the payments,” but his Treasury Department has already “said that legally they could do nothing to stop the bonuses, which, in fact, had already mostly been paid on Friday.” [NYT]
• Michael Scherer contends that “President Obama, despite his popularity and moral indignation, has few tools to stop” AIG. Instead of “exacting justice for past violations of the social compact,” Obama has “asked the country to look forward, to an era of new regulations that will prevent a repeat of these failures.” [Time]
