What Pops A Lefty's Eyes?

Sometimes you read something that crystallizes the realization that the two political camps are so far apart they don't even know how far apart they are.  Josh Marshall provides such a moment:

There's an eye-opening, perhaps eye-popping, article in tomorrow's Journal ("Obama Dials Down Wall Street Criticism"), the gist of which is that over the last three months Obama and his team have learned that they've got to start respecting Wall Street and the big banks if they want to get anything done.

Dr. M. then excerpts this from the WSJ:

Bankers were shell-shocked, especially when Congress moved to heavily tax bonuses. When administration officials began calling them to talk about the next phase of the bailout, the bankers turned the tables. They used the calls to lobby against the antibonus legislation, Wall Street executives say. Several big firms called Treasury and White House officials to urge a more reasonable approach, both sides say. The banks' message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses.

And his conclusion:

I'm not here to criticize the article because I'm not clear that what it's reporting isn't true. At the same time, it reads almost like it's about some alternate universe.

Rather than comment, I'd rather hear your take. It's not behind their subscriber wall. So you don't need a subscription.

Give it a read. Am I reading it right? What do you make of it?

What do I make of it?  Uh, are troglodyte righties allowed a question - what do I make of what?

Is Doc M shocked and awed that Team Obama is listening to the concerns of the financial community?  Or is he surprised that the financial community has the gall to express their concerns after receiving taxpayer support? 

I am absolutely at a loss to find something surprising, let alone eye-popping, in that paragraph.  Yet the good doctor seems to take for granted that his readers will be able to at least comment on, if not share, his surprise.  Surely it is not news to our friends on the left that financiers were concerned by last week's example of a grandstanding Congress retroactively changing the tax rules for TARP recipients.  Even Josh Marshall himself had reservations about the 90% solution last week.

Let's see - today's LA Times:

Geithner said the government would not subject its partners to new limits on pay or bonuses. That's as it should be. These firms, after all, are joining the team of rescuers, not grasping for a lifeline. Yet it remains to be seen whether investors are willing to take Geithner at his word or to believe that the rules won't change after the program launches. They have a right to be skeptical, especially in light of Congress' efforts to impose punitive taxes on bonuses paid by American International Group and other rescuees.

The NY Times:

The administration also paid close attention to the political climate. With the private sector increasingly wary of Congressional intervention in the business of those who participate in government bailout programs, Mr. Obama substantially dialed back the near endorsement he had given late last week to the House vote for a confiscatory 90 percent tax on bonuses like those A.I.G. doled out.

“As a general proposition, you don’t want to be passing laws that are just targeting a handful of individuals,” he said in an interview on Sunday night on CBS’s “60 Minutes,” in what administration officials said was a signal to investors that he understood their concerns about doing business with the government.

On that theme, there are plenty of talented, hard working people at Citigroup who help the firm make money and did not contribute to its current problems.  Is the hard working American taxpayer really better off if they quit and make their money elsewhere?  If some foreign exchange trader who made $10 million for Citi and $1 million for himself moves on to a hedge fund where he does not need to worry about Barney Frank's future attitude towards bonuses, how does that help the Citi rescue or the taxpayer?

Well.  I don't even know if that is responsive since I can't identify share the outrage over the "news" in this paragraph.

HERE WE GO:  Hilzoy emotes helpfully:

If the banks are "slow-walking" the stress tests and threatening not to help get credit flowing, that just is threatening not to help get the country out of the economic crisis.

That would be an absolutely appalling thing to do under any circumstances. It would be doubly appalling since these very people bear a lot of responsibility for that crisis. But the fact that they are making these threats not over some large issue of principle, but over their bonuses -- that's just breathtaking.

I guess it's breathtaking if you believe banks are monoliths in which each employee is involved in mortgages and their securitization and contributed to breaking the bank.  And if you believe that the senior banks execs (who have already given up their bonuses) are making a threat about their own conduct rather than identifying a likely response by people not involved with the mortgage mess other than by employment at,for example, Citi.  And if you believe that money managers being asked to help sweep up this mess under Geithner's plan have no reason to fear the wrath of a grandstanding Congress a year or two from now.

I am not a member of that faith-based community, but I appreciate the clarification.

And with props to Dan Riehl, we see that Ezra Klein questions the patriotism of recalcitrant bank employees.  Hmm, I question the patriotism of under-employed pundits who ought to volunteer to go down to a Citi office and make a few collection calls.  Gratis.  Doesn't he have an obliagation to be part of the solution, just as my hypothetical FX trader does?

Comments

[bad]

I'm glag my mortgage company doesn't tell me I can't buy Godiva anymore.

[clarice]

This sort of cluelessness is why Josh' alma mater has such a small endowment that its enrollees still look like the Ivy League of the 60's..Perhapos there's a lesson there..stay dumb about money and your legacies will have a better chance at going to your old school because it's too broke to admit poor kids.
(I've been dying to get that dig at Brown off my chest for years.)

[Sue]

What pops a lefty's eyes? An ice pick?

[z]

Same idea here: http://www.openleft.com/showDiary.do?diaryId=12429

Bowers is the lefty blogger who offered to support Dem candidates who pay him.

[Mustang0302]

What pops a lefty's eyes?

Uh...you mean beyond bugs#%t insanity?

[Pofarmer]

Let em earn their paychecks in the free market like everybody else. If your company just required a multi-billion dollar bailout, I don't think you get to bitch about the salary, no matter what part you had in it.

Sorry.

[Old Lurker]

"If some foreign exchange trader who made $10 million for Citi and $1 milion for himself moves on to a hedge fund where he does not need to worry about Barney Frank's attitude towards bonuses"

That guy had better be damn sure his new hedge fund employer did not profiteer on the backs of the taxpayers. Wonder what the lookback period is on such outrage?

[Sue]

Hey, Tom, I don't think it is going to get to committee to do the kabuki dance.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/23/AR2009032303201.html?wprss=rss_politics>Senate Will Delay Action on Punitive Tax On Bonuses

[Old Lurker]

snark off

[Old Lurker]

Anybody besides me sick of fair weather conservatives like George Will discovering that there is gambling going on at Rick's Place?

LUN

[Sue]

Old Lurker,

Hmmm...is he setting us up for reparations?

[Charlie (Colorado)]

I think bad just nailed it.

Is Doc M shocked and awed that Team Obama is listening to the concerns of the financial community? Or is he surprised that the financial community has the gall to express their concerns after receiving taxpayer support?

Both, I think, except that "after receiving taxpayer support" was unnecessary. I think, although you'd have a hard time getting Marshall to say so in so many words, the shock is that anyone has the gall to express their concerns, or that those concerns are considered. After all, what do they bring to the table? They neither have political science degrees nor do they attend the right parties and receive the right mailing lists.

The job of the ruling class is to rule, not listen.

[Charlie (Colorado)]

Anyone besides me sick of true conservatives who excommunicate people like George Will over differences of opinion?

[cathyf]

I guess what I don't quite get is why Obama's critics have not latched on to the fact that these retention bonuses are part of these people's severance packages. These are people who are losing their jobs at the end of the year. There are a LOT of people who are losing their jobs, or know people who are losing their jobs or have lost their jobs (all y'all know me, and hit, for example). How about this for a meme:

The congress and the president have mismanaged the economy so badly that millions will lose their jobs. And now, to add insult to injury, they want to take away those people's severance pay, too. Sure, this week it's AIG computer programmers and bookkeepers -- who are they going to go after next? Obama has just spent a trillion dollars on pork that we don't have -- they really need money, so severance pay makes a pretty juicy target.

[MayBee]

It all just demonstrates how incredibly two faced Obama is.
His Treasury Department worked with AIG on these bonuses and forced their protection into the stimulus bill.
When they were delivered, Obama made a teleprompter speech expressing "outrage".
Then Axelrod and Rahm, knowing they were behind the bonus protections, started trying to say real people weren't upset.
Obama goes on tv to say he can't govern from anger.
Obama goes to CA and says he wants people to be angry about the bonuses.
Tribe says the 90% tax would be constitutional.
Obama tells the NY he is for it.
The JournoLists all support the 90% tax.
Obama's role in the stimulus protections becomes more widely known.
The JournoLists start saying our media culture is trying to gin up fake outrage against the bonuses.
Obama says he isn't sure if the 90% tax is the best thing.
Tribe says the tax would probably be unconstitutional.
Obama shuts up about the damn bonuses.

This whole dance is to protect Obama.

[Ignatz Ratzkywatzky]

Anyone besides me sick of true conservatives who excommunicate people like George Will over differences of opinion?

Possibly, but I haven't met one.

Besides I think it's the bow ties, owl glasses and patrician exasperation that "true conservatives" are akin to a caterpillar in his salad that is the main source of discontent toward dear George.

[Charlie (Colorado)]

Cathy, honestly, I'm beginning to suspect that almost no one who's been writing about these things has ever had a job that had a bonus component in their pay. Or to think first, then emote.

[bad]

Think how stimulating all of that bonus money could be to the economy.

[hit and run]

There you go, Cathy, I wasn't given a "severance package", I was given a "separation bonus".

[Charlie (Colorado)]

This whole dance is to protect Obama.

Well, yeah, but that's a good thing. O doesn't want anyone to criticize O. That means he can be, to some extent, controlled. As here: once people realized that this was a damn-fool idea, and started to complain, O backed down. Shortly, he'll be saying that "as I've always said, the attacks on AIG were a bad idea."

In the mean time, the trend line on "Obama's an idiot" continues steeply upward, which "Obama's good" is leveling off near 30 percent. I'd be curious if any President has ever had his "strongly disapprove" go up so much, so quickly, in the first three months.

[bad]

Hit, I'm so sorry you don't have a package.

[Charlie (Colorado)]

Possibly, but I haven't met one.

Then you should get out more.

[Charlie (Colorado)]

Hit, I'm so sorry you don't have a package.

You think you're sorry.

[clarice]

Brownshirt bill about to be passed unless people fight this.
http://sweetness-light.com/archive/obama-brownshirts-bill-is-before-senate

[hit and run]

I suppose I could encourage you to stop thinking about my package.

[bad]

I suppose I could encourage you to stop thinking about my package.

Too late. I have a half track mind...

[Charlie (Colorado)]

Too late. I have a half track mind...

Tread lightly.

[bad]

lol Chaco

[Jim Ryan]

Anyone besides me sick of true conservatives who excommunicate people like George Will over differences of opinion?

Not really. I have a mental TrollHammer which kicks in right away, so that their mouths are moving but I can't hear anything. Like Kenny Powers's experience in the last episode of Eastbound when he got that dreadful phone call.

Conservatism is a big tent, by definition. Unlike the authoritarian and other ideologically fetishistic alternatives.

[Old Lurker]

"Anyone besides me sick of true conservatives who excommunicate people like George Will over differences of opinion?"

Needlessly nasty response, Charlie.

[Pofarmer]

These are people who are losing their jobs at the end of the year.

Huh?

That's the first I've heard of that. Is AIG going to cease existing finally?

[Old Lurker]

Jim Ryan, I meant to say the other day how much I appreciated the link to your blog. It was a fun read.

I also envy you your Charlottesville base of operations. I was a toddler when Dad went to law school there and we lived in an attic apartment on Rugby Road, and I myself went to grad school at UVa twenty years later when I learned that the real parties were on the first floors of the same road. Back then we noticed how many in the UVa orbit return to C'ville for their retirement years, and I appreciate why they do.

[Old Lurker]

PO, no, just some of the divisions. Some of those bonuses were for keeping some of them around for the wrapup of just those operations.

[bad]

OT

Ayers and Dohrn buddy, Rudd, from Weatherman days, has a book out that remembers things differently than the sanitized version Ayers prefers.

LUN

[Jim Ryan]

Gee, OL, we think alike again! I returned to Charlottesville after being gone 12 years (late 80s grad school here, married a townie then) and my mom is moving here this summer. I love the place. I know hardly a soul who isn't a lefty though. I never get to have a consversation with a conservative. (Well, a certain soldier just moved here...) When were you here for grad school?

Thanks for the complement on my blog. If you like it, I recommend my archives where I do have readers who get lost in there.

When in Charlottesville, please let me buy you a drink.

[Old Lurker]

You are a youngster Jim! My toddler term was 49-52 I think; my own was 70-72. My to-be-wife was a road trip gal from one of the helpful women's colleges down the road, just as my mother was back in my Dad's day.

[Phil Smith]

Human beings respond to incentives!! Super-hyper-duper-genius (and Kevin Spacey lookalike!) Josh Marshall stunned!

[rse]

clarice-

Just read the article on the GIVE Act.

Do you read it as establishing September 11 as at least a federal holiday?

[Jim Ryan]

OL, if you haven't been back, C'ville has changed, starting around ten years ago. Old Charlottesville began to fade away and be replaced by people from somewhere who have no Virginia accent. The economy went from slow to a gallop. Well, Mr. Jefferson's The Lawn and the Blue Ridge remain unchanged, and I can still get my haircut from the barber who's been clipping at the same spot for 49 years.

[Charlie (Colorado)]

Needlessly nasty response, Charlie.

No it wasn't.

[Charlie (Colorado)]

That's the first I've heard of that. Is AIG going to cease existing finally?

Then you aren't listening. We've discussed how this is reorganizing AIG, how the AIGFP group is shutting down, how some of the issues involved with this have to do with the difficulties of reorganizing a multi-trillion dollar multi-national company under existing bankruptcy statutes, and I asked you a couple threads ago how this reorganization was different from what you wanted to happen.

And yes, this is why I get cranky with this sometimes.

[Pofarmer]

That's the first I've heard of that.

Was talking about the information that some of these were supposedly severance packages.

[Pofarmer]

Then you aren't listening. We've discussed how this is reorganizing AIG, how the AIGFP group is shutting down, how some of the issues involved with this have to do with the difficulties of reorganizing a multi-trillion dollar multi-national company under existing bankruptcy statutes, and I asked you a couple threads ago how this reorganization was different from what you wanted to happen.

And yes, this is why I get cranky with this sometimes.

Geez, sounds pretty much like what happened to International harvester in 84. We already had the mechanisms to deal with this.

[Old Lurker]

"Needlessly nasty response, Charlie.

No it wasn't."

Was so.

Now your turn.

:-)

[Old Lurker]

"Old Charlottesville began to fade away and be replaced by people from somewhere who have no Virginia accent. "

Jim, same thing is being said about the Research Triangle area of NC.

See this is where we can restart the "best ham and biscuit" fights from last week...

[Ranger]

Was talking about the information that some of these were supposedly severance packages.

Posted by: Pofarmer | March 24, 2009 at 01:52 PM

The term is a technicality. These were retention bonuses paid to people to stay with a division of the company that was not going to be sold off, but closed down over the next two to three years. Their jobs were going away. The retention bonuses were designed to get people to stay in a dead end situation as long as possible so that maximum value could be extracted from the situation. So, in a sense, it was a severence payment dragged out over remaining life of the division.

[cathyf]

Geez, sounds pretty much like what happened to International harvester in 84. We already had the mechanisms to deal with this.

Yep, we do. The mechanism is called a "retention bonus" and it is pretty standard in plant shutdowns. Just because it's a financial products firm rather than a manufacturing firm doesn't mean that the laws of economics are repealed.

[Jim Ryan]

All this back-and-forth between Po and Charlie turns upon the question of whether the abrupt failure of AIG would have caused a global economic catastrophe that any reasonable person would say is morally, and otherwise, far worse than aggressive gummint action.

[Tom Maguire]

From Pofarmer:

If your company just required a multi-billion dollar bailout, I don't think you get to bitch about the salary, no matter what part you had in it.

Sorry.

Well, it is not a matter of them bitching, its a matter of them quitting. In my example, are Citi and the taxpayer better off if the highly profitable and highly paid FX trader leaves?

And the third choice - let's whine about his patriotic duty to serve and hope he works for 20% of his former pay - is probably not a realistic strategy (although it may be empirically tested over the net couple of years.)

[gus]

So Obama shytes all over wall street Tax Cheat Geithner tells us he wants more power take over firms and money is being shoveled at Liberal causes like ACORN.

The guy is clueless. HE believes government invents it's own money. Obama has never worked for a business.

[qrstuv]

Just the other day, Po was expressing doubt that these people could indeed find jobs elsewhere.

Last night I came across an article (sorry no link) about some execs who are quitting AIG, right now. It turns out they have a choice!!!

[Jim Ryan]

An AIG exec who didn't cause the mess but stayed on to fix it, only to hear calls for his head on a pike come payday and to have his paycheck torn up, has no patriotic duty to stay and fix it.

[boris]

whether the abrupt failure of AIG would have caused a global economic catastrophe that any reasonable person would say is morally, and otherwise, far worse than aggressive gummint action

Complicated by the suspicion certainty that this particular government is hell bent on exploiting the crisis to institute a social justice economy which many of us view with an emotion somewhere between dread and horror.

[Dorothy Jane]

Jim Ryan - I love your blog. I have just been reading it...

[matt]

much of their program seems to be a naked power grab disguised as necessary intervention. Rather than nationalizing companies, they seem to want to allow the camel's nose under the tent and then slowly screw up the companies so badly that the government must intervene. demonize Wall Street, big business, and their enemies and then move in and steal as much as they can.

[Jim Ryan]

Boris, yeah, that sure complicates it, doesn't it.

Thanks, Dorothy! I'm glad you like it.

[Pofarmer]

is probably not a realistic strategy (although it may be empirically tested over the net couple of years.)

Then all is right with the world. Is there somebody that can come in and SHUT THE COMPANY DOWN, for 20% of his former pay?

[Jim Ryan]

Is that blog yours, Dorothy? Interesting! You might like the two posts on Wharton in my April, 2007.

[Pofarmer]

Just the other day, Po was expressing doubt that these people could indeed find jobs elsewhere.

I don't beleive I ever made that arguement. My position is that if they can find other jobs, great. If folks think they're gonna get paid a premium to work for a company that's soaking up nearly 200 BILLION of taxpayer money so far, good luck with that, and if ya'll want to keep trying to make that arguement, best of luck. I may very well be the correct argument, but it will never win politically in this environment.

[GMax]

A handful of senior executives working within American International Group Inc’s controversial financial products unit have resigned, said a company spokeswoman late on Monday.

The division is at the heart of the financial problems that brought AIG to the brink of bankruptcy last September, saved only by a taxpayer bailout that has now swelled to as much as $180 billion.

The spokeswoman declined to specify the exact number of resignations, noting they were expected to be “manageable,” and said there were indications that more will follow.

Put this in the careful what you wish for dept. When the cost balloons, I am sure we can count on howls from the same that wanted to chain these folks to the desks and make them work for free. Aint gonna happen.

[Pofarmer]

whether the abrupt failure of AIG would have caused a global economic catastrophe that any reasonable person would say is morally, and otherwise, far worse than aggressive gummint action

Complicated by the suspicion certainty that this particular government is hell bent on exploiting the crisis to institute a social justice economy which many of us view with an emotion somewhere between dread and horror.

Yes, and yes.

Although, I think the Camel is in the tent to his tail, and simply opening the flap isn't going to get him to leave. I imagine a Camel in a tent will do some damage, and probably leave some "presents" whenever you finally do get rid of him. Let's hope we don't have to surrender the tent.

[Patrick R. Sullivan]

Is there somebody that can come in and SHUT THE COMPANY DOWN, for 20% of his former pay?

Why would anyone want to do that? You should remember what Adam Smith taught us over 2 centuries ago, people act in their self interest.

AIG's problem is, if they hire people willing to work for 20% of what someone else will, then they will probably have someone less than 20% as effective. Which would be lethal for AIG; there are TWO parties to every trade, and there are hundreds of billions at stake.

[RichatUF]

GMax-

That was the point all along. The worse Obama can make the crisis the better it is for him.

[Pofarmer]

and there are hundreds of billions at stake.

Well, Good Lord then, it's a good thing we haven't already shoveled Hundreds of Billions at it!!!!!!

[boris]

it's a good thing we haven't already shoveled Hundreds of Billions at it

Penny wise and pound foolish is not the smart play ... unless ... we are in position to exploit the failure.

Not sure that sabotaging hundreds of billions is worth it if the GOP gets stuck as the penny stupid reason it fails.

If I want AIG to go down the drain with hundreds of billions of taxpayer money just to prove it was a rotten plan to begin with, then I am just going to STFU and watch. I don't want any part of the blame for scaring away the talent "necessary" for it to have "worked". Not over 16% of one measly billion.

[Pofarmer]

Penny wise and pound foolish is not the smart play ... unless ... we are in position to exploit the failure.

So, can you quantify the risk? What's the hundred billion dollar downside vs, the hundred billion dollar downside?

[boris]

If it's already down the drain then I'm not that annoyed that some miscreants get a nice fat bonus out of the scam. I care more about Obama and dimorats taking the hit for wrongheaded blinkered policy.

[Pofarmer]

I care more about Obama and dimorats taking the hit for wrongheaded blinkered policy.

I care more about them using wrongheaded, blinkered, ideologically driven policy to further bore into our business and banking systems.

[boris]

They're gonna do what they're gonna do. We might be able to blunt some of the damage with public opposition, principled criticism and legitimate passion. I am willing to say "I want America to prosper but I wan Obama to fail". I am not keen on engaging in the kind of outrage mongering that could be spun as sabotage. IMO the retention/severance bonus tempest falls into that category. If the general public barfs on the bonus issue, fine, that puts the problem squarely on the Obama team's incompetence.

So I don't care if it is a MSM issue or a groundswell, I won't fight it. I do prefer that reasonable voices on our side, including Rush, see it as insignificant in comparison and in principle more fair than not.

[Pofarmer]

Yeah, boris, but you've got to realize that the bailouts were IMMENSELY unpopular. Remember shutting down the Congressional e-mail and phones? Any outrage over something like the bonuses is an offshoot of that. I'd expect to see more of it, not less, as we find out what money was spent on.