Read Barack's Lips - No Newer Taxes. Maybe.

It's not official until we hear it from the teleprompter but in a taped-live appearance on Jay Leno last night Barack Obama was cool to the idea of a special tax on financial services bonuses as passed by the House. This echoed the sentiments of host Jay Leno, who opposed the idea.  From the transcript:

MR. LENO: Welcome back. We are talking with President Barack Obama.

Before the break I mentioned that they had just passed this new bill which will tax them 90 percent -- and I said it was frightening to me as an American that Congress, whoever, could decide, I don't like that group, let's pass a law and tax them at 90 percent.

MR. OBAMA: Well, look, I understand Congress' frustrations, and they're responding to, I think, everybody's anger. But I think that the best way to handle this is to make sure that you've closed the door before the horse gets out of the barn. And what happened here was the money has already gone out and people are scrambling to try to find ways to get back at them.

The change I'd like to see in terms of tax policy is that we have a system, going back to where we were back in the 1990s, where you and I who are doing pretty well pay a little bit more to pay for health care, to pay for energy, to make sure that kids can go to college who aren't as fortunate as our -- as my kids might be. Those are the kinds of measured steps that we can take. But the important thing over the next several months is making sure that we don't lurch from thing to thing, but we try to make steady progress, build a foundation for long-term economic growth. That's what I think the American people expect. (Applause.)

However, per the Times Obama's scripted reaction was different:

In a statement, President Obama suggested he was supportive of the legislation, urging Congress to deliver a “final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated.”

It's not clear if that statement came from the fax or the Twitter; we really need to hear from the teleprompter to clear this up.  (If anyone can find this at the whiz-bang White House website that would be lovely - neither the blog, the press releases, the official statements nor the search are helping me, but I haven't checked for "Barack 08" emails.)  Gosh, mixed messages from Barack on the AIG bonuses - I bet no one saw that coming.  And do check Noam Scheiber of TNR, who opines that "There are third-world juntas that would think twice before doing this."

Obama also tried to dial back the outrage about the AIG bonuses.  Although earlier in the day he had likened them to suicide bombers, by this evening the financial services execs were law-abiding citizens:

MR. LENO: I just read today about Merrill Lynch. They handed out $3.6 billion -- it's not even million anymore, it's billions in bonuses. I know it would make me feel good -- shouldn't somebody go to jail?

(Laughter and applause.) I say that because I watch those people in New York, even people who had lost everything -- when Bernard Madoff went to jail, at least they felt they got something.

MR. OBAMA: Right. They got some satisfaction. Here's the dirty little secret, though. Most of the stuff that got us into trouble was perfectly legal. And that is a sign of how much we've got to change our laws -- right? We were talking earlier about credit cards, and it's legal to charge somebody 30 percent on their credit card, and charge fees and so forth that people don't always know what they're getting into. So the answer is to deal with those laws in a way that gives the average consumer a break.

When you buy a toaster, if it explodes in your face there's a law that says your toasters need to be safe. But when you get a credit card, or you get a mortgage, there's no law on the books that says if that explodes in your face financially, somehow you're going to be protected.

So this is -- the need for getting back to some common sense regulations -- there's nothing wrong with innovation in the financial markets. We want people to be successful; we want people to be able to make a profit. Banks are critical to our economy and we want credit to flow again. But we just want to make sure that there's enough regulatory common sense in place that ordinary Americans aren't taken advantage of, and taxpayers, after the fact, aren't taken advantage of. (Applause.)

That continues the mixed messages from Obama on this topic.  He is outraged by the bonuses but his hands are tied, since "all these contracts were written well before I took office".  Yet it was his Treasury officials who urged a modification of the stimulus bill so that bonuses agreed before Feb 11, 2009 would not be affected.  Who's in charge, No Drama Obama or Feel the Rage Barack?

Obama provided a history of the AIG debacle that is not supported by the facts but will no doubt reassure people wondering about their insurance contracts with AIG:

MR. OBAMA: Well, look, here's what happened. You've got a company, AIG, which used to be just a regular, old insurance company. Then they insured a whole bunch of stuff and they were very profitable and it was a good, solid company.

Then they decided –- some smart person decided, let's put a hedge fund on top of the insurance company and let's sell these derivative products to banks all around the world –- which are basically guarantees or insurance policies on all these sub-prime mortgages.

And this smart person said, you know, none of these things are going to go bust; this sub-prime thing, it's a great deal, you can make a lot of profit. So they sold a whole bunch of them –- billions and billions of dollars. And what happened is, is that when people started going bust on sub-prime mortgages you had $30 worth of debt on every dollar worth of mortgage –- and the whole house of cards just started falling down.

In fact, the AIG insurance subsidiaries were heavily invested in mortgage securities and lost heavily - per the Dec 31 2008 filing (or the SEC 10-K), AIG had $55 billion in realized capital losses in 2008 that were outside of the AIG FP unit (including $5 billion of realized losses in the general insurance portfolios and $44 billion in life insurance - see p. 67).  But blaming everything on unregulated credit derivatives is a better story for politicians who reflexively favor more regulation when the current crop of regulators mysteriously fail.  As to whether Obama is actually aware of this and is just blowing smoke, or sincerely believes his own "blame derivatives" story - who knows?

PROPS FOR A GOOD CLOSE: 

MR. LENO: All right, one last question. Now, when is the dog coming? I keep hearing about the dog. It seems to me –- when was the dog supposed to be there by? I thought it was, like, as soon as --

MR. OBAMA: Listen, this is Washington –- (laughter) –- that was a campaign promise. (Laughter.)

MR. LENO: Oh, wow. Wow. Man. (Laughter and applause.)

MR. OBAMA: I'm teasing. The dog will be there shortly. (Laughter.)

MR. LENO: How soon?

MR. OBAMA: We have actually sort of been laying the groundwork here. We’ve got a trip, I've got to go to the NATO summit. When we get back, dog will be in place.

MR. LENO: Wow. And it's, what, a Portuguese water head? (Laughter.) What is it, what kind of dog is it?

MR. OBAMA: It's not that. (Laughter.)

MR. LENO: It's not that.

MR. OBAMA: It's not a "water head." (Laughter.)

MR. LENO: Whatever they are, I don't know what they are.

MR. OBAMA: That sounds like a scary dog. (Laughter.) Sort of dripping around the house. (Laughter.)

MR. LENO: I don't know what it is.

MR. OBAMA: No, no. We're going to get a dog that is –- that I think the girls will have a great time –- I think I'm going to have a lot of fun with it. You know, they say if you want a friend in Washington, get a dog. (Laughter.)

MR. LENO: Exactly. Mr. President, I must say, this has been one of the best nights of my life. Thank you very much, sir.

President of the United States. (Applause.)

Leave 'em laughing.   Words to live by for the next four years.

Comments

[verner]

Remember the Movie American Dreamz? We're there folks.

Obama just needs to trade in the teleprompter for a little ear receiver.

[Jane]

But when you get a credit card, or you get a mortgage, there's no law on the books that says if that explodes in your face financially, somehow you're going to be protected.

SO if I go to Mohegan sun and put $1000 on #3 and #00 comes back, can I say the roulette wheel exploded in my face and I deserve protection?

YES I CAN in an Obama world.

[Extraneus]

One of the best nights of his *life*.

[What, no &gag; html character? Damn.]

[pagar]

JANE, Just tell the floor supervisor you weren't aware of all the fine print on the rules and you want to change your bet or you'll get Jesse and his Acorns to come down and stage a demonstration.

[Lori]

How do you think Obama came up with the toaster blowing up in your face analogy? And the simpleton language he uses to explain the AIG situation? I think that he is so clueless about economics and finance that this is the way his advisors explain situations to him and he doesn't understand any of it.

[Extraneus]

Only if you've already signed a contract which said it would come out #00, Jane.

[Donald]

Well that would be good for me cause I'm a meth level black jack addict. I'd be rich!

[Pofarmer]

Dang, Jane picked up on the same passage I did. Talk about your poor analogies. Credit doesn't "blow up in your face."

Whaada buncha idiots.

[kim]

If this is his level of understanding, we've got Special Problems.
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[kim]

Terence Corcoran, of the National Post, at RCP, has a good round-up of the circus news: 'Is this the End of America?'
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[centralcal]

I see our President Celebutard is now sending out videos of himself to foreign countries.

Hope the DVD Iran got is in the right format!

[kim]

Pitiful he's offering them a 'fresh start'. They must be laughing their asses off, because to them it looks like a 'head start'.
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[Jane]

Barney Frank wants to hunt down and prosecute anyone who contributed to the financial meltdown. The only question is, when will he arrest himself?

[kim]

Heh, I'll bet he'd like to put an Embassy with staff over there. I'd bet they'd like that, too.
=================================================

[kim]

Oh, I know, Jane, Frank's hypocrisy is egregious, particularly considering how much he is at fault in all this mess. By the way, do you have any idea who pushed the phony Boston Fed study on red-lining?
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[kim]

A 'fresh start' when they are practically over the finish line. What a compleat idiot. I'll bet Hillary is putting that one in her little piggy bank.
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[kim]

Oh, she's positioning herself alright. What are the chances that Obama won't be so vulnerable, and the Republicans won't be mounting a fierce challenge by early 2012. It'll be 1968 all over again. Except Obama won't cave like LBJ; he's got two middle fingers, you know.
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[clarice]

Guys, I don't know about you, but I can't believe what's happening. And when I watch how many people are buying this swill I feel like Ferris Bueller's sister.
HELP
SOS
I'm lost in a world of carnie scamsters and brain dead bozos.

[hit and run]

Jane:
Barney Frank wants to hunt down and prosecute anyone who contributed to the financial meltdown. The only question is, when will he arrest himself?

This would be a good point to get Senator Grassley's considered opinion of the proper action Barney Frank should take.

[Jim Ryan]

Clarice, I feel the same way. I think the government is my enemy now. I cannot predict what they will do next. We now have a government of men, not of laws. Unfortunately, the men happen to be vicious fools.

[narciso]

I admit the Ferris Bueller's reference, hadn't occurred to me, he is kind of Ferris Bueller, from Chicago, full of snark and with no clear idea of where he's going, Technically you could say he's Cameron, trying to roll back the mileage on his father's sports car, and of course causing
it to crash into the trees. You're right it would be funny if it wasn't so damn stupid.

[ben]

"One of the best nights of his life."

And the ONE didn't even perform a miracle or anything. Nobody in the audience threw their crutches away and shouted "I can walk!!!".

[James D]

You'd think that Obama might want to have that credit card conversation with his Vice President. You'd think that a guy who was a Senator from Delaware for 30+ years, and who's received probably millions of dollars in donations from credit card companies, and who's had a huge hand in writing legislation that impacts the credit card industry, might have some thoughts on the subject.

I'm just saying.

[Old Lurker]

Clarice, Jim, you know that pessimism has been my theme for some time since I abandoned my lurker status here. Every day brings a new confirmation of that point of view.

I'm redoing trust arrangements for my twenty something daughters, and Mrs. Lurker and I made the heretofore unthinkable decision to base them all off shore, and to (only with the best legal advice available for such matters in DC) complicate and obfuscate the structure hoping that over time the bread crumbs will be harder and harder to find. As DoT has opined from time to time, we are not concerned for ourselves in what years remain, but we are so sad for the kids and the families we expect them to start.

THIS government, and the one still rolling of the assembly line, is indeed our enemy and I believe that breaks the compact as to voluntary taxation. Perhaps not today...but coming soon.

[Jim Ryan]

OL, I'm not concerned for myself either, but what am I going to do about my boys of four and eight?

[cathyf]

But we just want to make sure that there's enough regulatory common sense in place that ordinary Americans aren't taken advantage of, and taxpayers, after the fact, aren't taken advantage of.

Oh, you mean the way ordinary Americans and taxpayers were taken advantage of when scumbag lawyers sued the banks to force them to loan money to deadbeats, and the CBC forced the FMs to buy the deadbeats' loans on the secondary market?

[MayBee]

where you and I who are doing pretty well pay a little bit more to pay for health care, to pay for energy, to make sure that kids can go to college who aren't as fortunate as our -- as my kids might be.

I hate this line above, and I know I've said it a million times.
Jay Leno and Barack Obama are multi-millionaires. But Barack Obama isn't proposing new taxes on multi-millionaires.

When Barack Obama was making $250,000/year under the Clinton tax rates, he pled poverty. They couldn't save for college, they had a junky car, they were trying to pay off their college loans, etc.

Now he's a multi-millionaire, and he uses himself as an example of the kind of people who can afford to pay more in taxes. Good thing he didn't use Daschle or Geithner as examples.

Also, I wonder if Jay Leno at $30,000,000/year salary is GREEDY.

[Old Lurker]

Jim, the best you can do is instill in them your moral and religous values, provide for them the best education you can (THAT is very very tricky) including, whatever their inclinations indicate, a good foundation in history, economics and literature, and then encourage them as they find their place in the world. The money part is not even secondary...it's pretty far down the list, and will take care of itself provided the other parts were accomplished.

At least that's my story and I'm sticking with it...

[Ignatz Ratzkywatzky]

You know 'water head' is a derogatory term for the mentally handicapped, referring to the hydrocephalic.

What a couple of clowns and I say that as one who has always founds clowns kind of creepy but seldom funny (except for Red Skelton).

[bad]

We're a trillion dollars deeper in the hole than the administration knew.

SHOCKER

[Jim Ryan]

OL, Thanks. You and I think alike, given what you wrote. The homeschooling my boys are receiving from us is deep and rich in the ways you mentioned.

[jimmyk]

I hate this line above, and I know I've said it a million times.

I hate it too, but more because it's such a straw man (surprise, surprise). People who are "doing pretty well" already have been paying a lot more, including under Bush. But you're right, these megamillionaires find it easy to tell people who are making $250,000 that "we" can afford to pay more.

[Charlie (Colorado)]

You'd think that a guy who was a Senator ... for 30+ years ... might have some thoughts on the subject.

I wouldn't.

[bgates]

Gosh, mixed messages from Barack

They should let him join JournoList so he can stay on message.

[Old Lurker]

Jim, congrats on the homeschooling. That is a great undertaking. If you stick with it as they get older, you will find lots of organized assistence out there.

[eaglewingz08]

Just a reminder a 'waterhead' is slang for a person with Down's Syndrome or retarded. And if you listen to the tape and watch Obama's hand movements he doesn't say 'dripping' he says 'tripping', as in he doesn't want a developmentally disabled dog tripping around in the WH