Public Outrage Over AIG Bonuses! Tim Geithner to Resign…!?
March 18, 2009 3 Comments
ATLANTA— A whopping 85% of Americans are either “outraged” (59%) or “bothered” (26%) by the massive bonuses about to be paid out by AIG. It’s rare you see something about which so many Americans can agree. And it is obvious that this is manifestly a Barack Obama problem and not a George W. Bush problem. For a young president who has been all too eager to pass the buck of the economic crisis to Mr. Bush, Mr. Obama has finally had to accept the buck for this one.
Is the public outrage justifiable? And should Tim Geithner resign?
Personally- I am with the 85% group here. I have been outraged by the AIG bailout from the beginning. I think the government’s policies around these big bank and insurance company bailouts have been extremely haphazard, grossly ill-considered and ultimately unhelpful. I agree with Larry Kudlow, the most the government should have done last September is let AIG go bankrupt and put the company in some sort of government sponsorship, to assist with an orderly unwinding of its businesses. We would have $170 billion of tax payer money still intact. And any of the market turmoil associated with that bankruptcy would be a part of our collective past, having been absorbed last September and October.
Instead, both the Bush and Obama Administrations have artifically sustained this dying beast so that it can be a conduit for U.S. taxpayers to bail out European banks and pay extravagant bonuses to reckless employees, all while avoiding the government’s favorite shadow demon called ”systematic financial collapse.”
The Obama Administration should let this company go bankrupt and dissolve it, something that should have done for less expense long ago. Keeping it alive only guarantees more taxpayer losses and stokes further taxpayer outrage.
Keeping it alive also shines a humbling light on government incompetence, typified most poignantly by the apparently inept Tim Geithner. Several people are putting the odds at 30 percent that Mr. Geithner takes the fall for this. I think he should resign. The delinquent taxes identified at his confirmation were bad enough. His incompetent management since has been much, much worse. He should have learned about this AIG bonus problem during his involvement in the initial bailout last Fall and he should have done more to address it back then. His bungling here and on his elusive “bank plans” are signs of gross incompetence to me. Let this guy ride, I say.