So, yes, people are “angry” at Wall Street. They are also “angry” at Octomom. I wonder if the depth and quality of those two rages differ–or is this all just a television show?…If you want to be angry about something, get pissed at a media culture that goes beserk about bonuses one week and forgets all about them the next. And be worried, quite worried, about a society for whom anger is a form of entertainment.
â€” Joe Klein (1946 -), columnist and author
The Dittohead Caucus in the U.S. House — which includes every GOP representative — followed their dictates of their leader, Republican Party boss Rush Limbaugh, and voted overwhelmingly against a bill that would impose a heavy tax on bonuses received by executives at financial institutions that are on the dole from U.S. taxpayers.
Earlier this week, the GOP boss asserted his support for the $400 million in U.S. taxpayer dollars that AIG — in which taxpayers now have an 80 percent ownership — planned to give as “retention” bonuses to the same traders whose risky schemes contributed to the collapse of the world economy:
LIMBAUGH: “Let me tell you something, folks. I am all for the AIG bailouts, and I am all for the AIG bonuses. Well, Iâ€™m not for the bailouts, well, in a way Iâ€™m for the bailout because Iâ€™m for the bonuses.”
In lockstep with Limbaugh, 113 out of the 198 Republicans in the House voted against taxing the bonuses of the financial industry fatcats. Six out of 235 Democrats also voted against the tax.
The measure passed 328-93, and is now moving to the Senate.
Just six weeks ago, Senate Minority Leader Mitch Mitch McConnell (R-Ky.) rushed to microphones to argue against government-imposed salary and bonus caps for executives at companies being bailed out by American taxpayers, now McConnell claims to be outraged that the government did not impose these same caps on AIG. Via ThinkProgress:
McConnell in February:
MCCONNELL: “I really donâ€™t want the government to take over these businesses and start telling them everything about what they can do. [â€¦] We have to resist the temptation to basically dictate to these businesses how to run every aspect of their operation.” [ABC News, 2/4/09]
McConnell in March:
MCCONNELL: “Well, it is an outrageous situation. I wrote Secretary Paulson back in October complaining about the way AIG had been doing its business. … This is an outrage.” [ABC News, 3/15/09]
When you hear the emerging facts on the AIG bonus pay-out, no matter how tired you are of the whole topic, you get outraged all over again. According to Attorney Gen. Andrew Cuomo’s office, as reported by Reuters:
* AIG distributed more than $160 million in retention payments to employees at its Financial Products unit, the subsidiary Cuomo says was “principally responsible for the firm’s meltdown.”
* The top AIG bonus recipient received more than $6.4 million
* The top seven bonus recipients received more than $4 million each
* Top 10 bonus recipients received a combined $42 million
* 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million
* 73 people received bonuses of $1 million or more
* 11 recipients of “retention” bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million
* Employment contracts with AIG bonus recipients had required most individuals’ bonuses to be 100 percent of their 2007 bonuses “despite obvious signs that 2008 performance would be disastrous in comparison to the year before.”
My friend’s husband recently retired as a sales rep for Valic, which was taken over by AIG some years ago. Not only does he have to put up with jokes about the size of his final bonus ($0), but he has to reconcile retiring from a disgraced company after many years working for honorable ones. I think I hate AIG.
Just days after alleged death-squad leader Dick Cheney gave his hearty endorsement to Rush Limbaugh as the Republican Party’s new boss, Limbaugh weighed in on the controversy over $400 million in taxpayer-funded bonuses slated to be paid to derivatives traders at insurance giant AIG.
On his radio rantfest yesterday, Limbaugh came out in support of corporate pork and then — after quickly retracting his support of bailouts and then just as quickly retracting the retraction — came out full force in favor of the AIG bonuses, which would use taxpayer money to reward the traders whose risky schemes crashed the world economy:
Rush Limbaugh: “Let me tell you something, folks. I am all for the AIG bailouts, and I am all for the AIG bonuses. Well, Iâ€™m not for the bailouts, well, in a way Iâ€™m for the bailout because Iâ€™m for the bonuses.”
And Rush said: “We need some perspective here. Okay, so theyâ€™ve got $170 billion in bailouts, the bonuses are $165 million. The AIG bonuses are one-tenth of 1 percent of all the bailout money, not just for AIG, but for everybody else. Itâ€™s in their contracts. What is the number-one asset any company has? Itâ€™s people. Itâ€™s employees. This $165 million in bonuses is gonna help estimate the economy. Itâ€™s going to stimulate the New York City economy, $165 million, one-tenth of 1 percent of all bailout. The populist thing to do, the popular thing to come and do here today is bang my fist and be outraged over how in the world can they use my taxpayer money this way.”
Of course, many of the traders who have received the initial $165 million in bonuses were citizens of Great Britain who worked in AIG’s London office, and so won’t be stimulating the U.S. economy. It was also revealed yesterday that after receiving these “retention bonuses,” many of the traders left AIG for greener pastures.
In this snippet from yesterday, he criticizes a senator for suggesting that AIG bonus recipients should commit suicide — conveniently omitting the fact that the senator was a Republican — and then he deliberately misstates facts about Senate Banking Chair Chris Dodd’s efforts to restrict the bonuses from being paid out:
Here’s another shining example of a Republican reflexively refusing to accept responsibility for his own and his party’s misdeeds and incompetence:
Former Vice President Dick Cheney says don’t blame George Bush for leaving President Obama with an economic catastrophe.
It was everyone else, and the Democrats, who brought on disaster, said Cheney, who was one of Bush’s most influential advisers over his eight years leading the country.
“There’s no question that what the economic circumstances that \[Obama\] inherited are difficult ones,” Cheney said on CNN [Sunday] morning. “I don’t think you can blame the Bush administration for the creation of those circumstances.”
Instead, Cheney suggested the current problems stem for the worsening world economy and Democratic obstruction of Bush’s attempts at reforming the government-backed mortgage giants, Fannie Mae and Freddie.
“This isn’t something that happened just in the Bush administration or just in the United States,” Cheney said. “We are in the midst of a worldwide economic period of considerable difficulty here.
“It’s important to understand that. It doesn’t do just to go back and say, well, ‘George Bush was president and that is why everything is screwed up,’ because that is simply not true,” Cheney said.
Got that? Bush and Cheney are the victims here. Riiiight.
The mortgage crisis may have lit the fuse — and Cheney conveniently omits the fact that until recently Bush used to claim the expansion of home ownership as one of his administration’s very few successes — but what caused the implosion was deregulatoin of financial institutions by GOP bank toadies like former Sen. Phil Gramm.
On American Public Media’s Marketplace last week, economist Susan Lee suggested a better way of tracking the economy than, certainly, individual 401k accounts, and even the Conference Board’s indices — which she says have incorrectly predicted five recessions since 1959:
SUSAN LEE: I suggest you watch an index that will tell you when the world economies are starting to perk up and when trade conditions are really starting to ease. It’s called the Baltic Dry Index.
Essentially the Baltic Dry tracks the average daily price for shipping dry bulk like coal, iron ore, wheat and soybeans. There are three things that make it such a good leading indicator. One, the index looks at raw materials, so it captures activity at the very beginning of the production process. Two, it looks at ocean shipping, so it reveals what’s happening to international trade — the critical driver of global growth. And, three, the shipping business depends heavily on credit, so the Baltic Dry indicates whether credit is tight or loose.
Back in 2005, when the world’s economies were just fine and credit was abundant, the Baltic Dry looked like a powerhouse. But it peaked in May of 2008. And it’s been heading almost straight down ever since — losing about 90 percent of its value.
Since January, the Baltic Dry Index, which peaked at about 12,000 in May 2008, has drifted upward slightly, rising to around 2,000.