Should the federal government be using every available legal means to block or retrieve executive bonuses at financial service companies like AIG that are receiving bailout money?
Or...
Should the federal government be urging citizens to urge members of Congress to authorize even more public money for executive bonuses at financial services companies like AIG?
The reason I ask is because today President Obama is currently calling for both of these actions to take place, and it is confusing the hell out of me.
President Barack Obama will call on millions of supporters to knock on neighbors' doors this week to pressure Congress to pass his record $3.55 trillion budget, a Democratic official said on Monday.
Obama will ask people who volunteered for his presidential campaign to gather signatures from neighbors to support his budget, which proposes a $1.75 trillion deficit to lift the country out of recession and lay the groundwork for healthcare reform and other big initiatives.(...)
The 13 million people on Obama's campaign list will be asked to call their representatives in Congress to urge them to support the budget plan.
This is fantastic. One of the more empowering aspects of President Obama's campaign was his promise to supporters that they would be needed in the legislative process once he was in office. The budget is the biggest aspect of the legislative process, so there is no better time to tap into this support network.
I want to comment on the news about executive bonuses at AIG.
This is a corporation that finds itself in financial distress due to recklessness and greed.
Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?
In the last six months, AIG has received substantial sums from the US Treasury. I've asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.
Again, good in the abstract. It is absolutely essential that the federal government use every available means to get back the bonuses. These are the people who destroyed the economy, and they should not be funding their lavish lifestyles using public money.
However, even though mobilizing supporters to pass his budget and demanding money back from AIG look good in isolation, there is a serious cognitive dissonance problem when they are viewed side by side. Namely, President Obama's budget contains $250 billion "placeholder" in money to companies like AIG, which will undoubtedly continue to be used to pay financial services executives huge bonuses.
The Treasury secretary refused to rule out a request from the Obama administration for more bailout money, saying, "our hope is that Congress would come together and do what is necessary to make sure the financial system is strong enough."
Obama left a $250 billion "placeholder" in the budget for additional aid to the financial industry.
In his prepared remarks, Geithner said that "doesn't represent a specific request."
So, here is my question: if I knock on doors, make phone calls to Congress, and sign petitions to help pass the budget, how am I not knocking on doors, making phone calls to Congress, and signing petitions in order to demand even more taxpayer funded bonuses for executives at companies like AIG?
This is a serious cognitive dissonance problem. Should the federal government be using every available legal means to get back executive bonuses at financial service companies that are receiving bailout money, or should it be urging citizens to demand that members of Congress give even more public money for bonuses to these companies? I guess it isn't an either / or question, because today President Obama is calling for both.
With another executive bonus scandal unfolding in front of our eyes, with the federal government apparently powerless to stop it, and with the budget setting aside for times as much money next year for bailout funds as for health care funds, it is pretty hard to drum up the desire to take action on behalf of the budget. Is the only way we get more health care coverage if it comes with another $250 billion for Wall Street bailouts? I certainly hope that isn't the case, because as much as I want more money for health care, I don't want to give another dime to the executives and stockholders at places like AIG. There are some members of Congress who agree:
We need to find a way to strip the bailout "placeholder" from the budget. It is an extremely murky process, so I am not sure how it can be done, but we have to find a path. I want to help pass more health care, but I can't, in good conscience, ask people to go out and knock on doors, make phone calls, and sign petitions in favor of more executive bonuses for AIG. Taking action like that even strikes me as dangerous-you might get threatened or attacked for knocking on someone's door and asking them to support more taxpayer funded bonuses for Wall Street executives.
We have to get the bailout out of the budget. Otherwise, hundreds of thousands of grassroots progressives are going to be hitting the streets, and urging people to urge Congress to give more taxpayer funded bonuses to Wall Street executives.
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