Has outrage worn out its welcome? That question arose as members of Congress, which has passed a balanced budget in three of the past 40 years, took turns this week bashing insurance giant AIG for handing out an estimated $165 million in executive bonuses as taxpayers are being asked to bail AIG out of its bad business decisions.
Congress, especially the House of Representatives, is often a useful pressure valve for public outrage. It certainly lived up to its billing when members of a House subcommittee seemingly tried to outdo one another in expressing their outrage over “Bonusgate.”
At one point, Rep. Jeb Hensarling, R-Texas – opposed to the massive federal bailouts of Wall Street from the beginning – mocked the reaction to the bonuses as “the outrage of the week.”
President Barack Obama told a California audience they were “rightfully” outraged.
“I’m outraged, too,” Obama said, and then went on to declare the bonuses an offense against “what’s fair and what’s right” and “our values.”
Obama’s administration knew the bonuses were coming, anticipated the rightful outrage their discovery would provoke, and yet could not or would not stop them. Bonusgate smacked both of business-as-usual and ineffectual oversight, not the change that Obama said was coming to Washington.
We get it that people are angry, that the president is outraged, and that he inherited a lot of these problems. Now, what are you going to do about it?
When the bonuses first became public, the president and some of his top financial advisers differed on whether they could be stopped. Democrats in power scrambled to get them revoked.
Senate Banking Committee Chairman Chris Dodd, already under fire for an allegedly favorable loan from Countrywide Mortgage, acknowledged he helped write an amendment that allowed the bonuses, although he said he did not know of the $165 million in AIG plums when he was writing it.
Taxpayers have roughly an 80 percent stake – about $170 billion in aid and loans – in AIG. The bonuses were peanuts, relatively speaking, but symbolically huge, and that effect was vastly underestimated by Treasury Secretary Timothy Geithner.
Obama stood by his man, saying Geithner faces a “multiplicity of problems” faced by no Treasury secretary since Alexander Hamilton in the formative years of the republic.
“Nobody is working harder than this guy. He is making all the right moves in terms of playing a bad hand,” Obama told reporters before heading off to California and an appearance on the “The Tonight Show with Jay Leno.”
Looking back, we may well conclude that Bonusgate marked the moment when the Obama administration owned the nation’s financial crisis. Outrage is useless from this point on. So is blaming the predecessor.
Obama now will be measured on action and results. Bonusgate may have made that task much harder. Congress was already balking at his $3.65 trillion budget and the possibility of billions more in stimulus and bailout spending.
Rep. David Scott, D-Ga., a member of the subcommittee that grilled AIG’s overseer, said Congress needed to “put a pause button” on future bailouts while striving to win back the confidence of the public.
“As we point fingers in Congress,” Scott said, “we have got to recall that there are three fingers pointing right back at us.”
As political spectacle, it doesn’t get much more ironic than the AIG hearing. Elected representatives of a government that has put its people $11 trillion in debt took turns expressing outrage over immoral business decisions and lecturing on fiscal responsibility.
The man appointed to fix AIG, Edward M. Liddy, had nothing to do with the company’s problems. He is working for a dollar a year and has had death threats to him and his family.
And yet Liddy went to Capitol Hill to become a piñata for the latest dose of politicians’ outrage. Liddy told committee members that he’d asked bonus recipients to voluntarily return them, and that some had. Most members of the oversight panel were unsympathetic.
Rep. Paul Hodes, D-N.H., says AIG should stand for “arrogance, incompetence and greed.”
Some might add, “An Incompetent Government.”
Chuck Raasch is political editor for Gannett News Service. E-mail: craasch@gns.gannett.com.
Raasch’s blog: Get more behind-the-scenes reports, context and analysis about politicians and the political process in Raasch’s Furthermore blog. Look for it at http://gns.gannettonline.com/apps/pbcs.dll/section?Category=BLOGS03.