Economic Credibility Gap: Emanuel Says AIG A Minor Distraction, Obama Says We Should Be Very Angry

by: David Sirota

Wed Mar 18, 2009 at 14:45


Earlier this week, we saw President Obama feel compelled to go before the cameras and effectively throw his entire economic team under the bus, saying that - contrary to the declarations of Wall Street sycophants Larry Summers and Tim Geithner - something could indeed be done to stop AIG's egregious bonuses. The shockingly public fissure between the president and his economic team raised the very real prospect of an economic credibility gap, whereby one part of an administration is saying something very different from another part of an administration. Unfortunately, that seems to be happening again, as a schism erupts between President Obama and his chief of staff, Rahm Emanuel.

Yesterday, Emanuel told reporters that the White House sees the giving away of $160 million taxpayer dollars as a mere annoyance - an unimportant "distraction":

As angry as the president is at the news about A.I.G., which he learned Thursday, Mr. Emanuel said, "his main priority is getting the financial system stabilized, and he believes this is a big distraction in that effort."

Obama, recognizing the idiocy of his top aide saying that burning $160 million in taxpayer money is a mere "distraction,"* today held a surprise press conference to try to clean up the mess. He said that far from a mere "distraction," the AIG bonuses are worthy cause for national outrage:

The president said he is sympathetic to the intense outrage over bonuses for executives of a company that has been propped up by billions of dollars in federal aid, and he shares the fury of taxpayers. "I don't want to quell anger," Obama said. "I think people are right to be angry. I'm angry."

So once again, we see a president who is very much in touch with the American public having to clean up for the crew of Washington insiders in his administration who keep expressing a "let them eat cake" attitude towards that same American public. That's not "Team of Rivals" brilliance or strategery, that's just mixed messages, and as I said before, it could open up a serious economic credibility gap for the president - a credibility gap that might make people ask A) Who the hell is in charge? B) Since when did was it OK for government officials to tell us that $160 million was a mere "distraction"?  B) Why can't the president keep his people on message? and C) Why does the president have these insiders speaking for him and working for him in the first place?

* As a sidenote: Think about how far down the rabbit hole we really are. In a political culture that asks us to be outraged by $200,000 earmarks, we're supposed to see $160 million as a mere "distraction." Indeed, I would just add to Chris's earlier post by saying that the $160 million bonuses aren't just important because they highlight the bigger bailouts - they are also important unto themselves simply because $160 million is a shit-ton of money, regardless of what percentage it is of anything else. But I guess that's what handing over 8 trillion taxpayer dollars to the financial industry does to our political discourse - it can make us lose a bit of perspective on just how much taxpayer money we're really talking about here.

David Sirota :: Economic Credibility Gap: Emanuel Says AIG A Minor Distraction, Obama Says We Should Be Very Angry

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David I usually love what you've got to say, but... (0.00 / 0)
In this one instance I think you missed the mark.  I don't think that Rahm (as much as I loathe him) was dismissing the bonus issue.  It sounds to me like he was saying that this kind of irresponsibility on the part of AIG while on the tax payer dole is distracting from other important priorities.  He's not saying that it's trivial, he's saying that it's an improper and avoidable action that's forcing the White House to do one more thing when they have a million others they've got to work on.

Check out Blue Arkansas:
http://bluearkansas.blogspot.com/


Finding a little patch (0.00 / 0)
of "technical truth" whereby the message of Obama and the message of Rahm might be reconciled hardly does justice to the real, felt import of each's message.

Rahm is clearly communicating that Obama believes public anger is over a non-consequential issue. Obama himself is communicating that he believes that the depth of anger is justified.

Yes, one can argue, rather lamely, that it is in principle possible that one can be very, very angry over an issue, that that anger is justified, but that the issue is, in the larger scheme of things, of no consequence.

But that, I think, is not something most people will find a compelling response.


[ Parent ]
Do what now? (0.00 / 0)
This is what Rahmbo said:

As angry as the president is at the news about A.I.G., which he learned Thursday, Mr. Emanuel said, "his main priority is getting the financial system stabilized, and he believes this is a big distraction in that effort."

Now at what point are you finding him saying that the public anger isn't justified?  I'm sorry, but it's just not there.

Check out Blue Arkansas:
http://bluearkansas.blogspot.com/


[ Parent ]
"Distraction" (4.00 / 1)
The term "distraction," by its nature, implies its a less important - or even unimportant issue - in comparison to other issues. In short, it implies that we shouldn't pay attention or focus our ire on the situation. That's exactly the opposite of what Obama is saying.

[ Parent ]
Hard to tell (4.00 / 4)
I clicked through the links, but it is unclear who Rahm blames for the distraction, or if blame had anything to do with the quote at all.

It's almost fun, in a perverse sort of way, watching this all play out.  On one level this is a distraction from getting the banks rolling again.  However, at a deeper level, this controversy highlights the greed that got us into this mess in the first place.  The greedy must feel shame if we are to get out of this.  The culture has to change.


[ Parent ]
You have hit the nail on the head. (0.00 / 0)
The culture has to change.

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.

[ Parent ]
Culture (0.00 / 0)
I actually think changing the culture is more important than even changing the laws.  While we certainly need to change the regulating laws and enforcement, the direct effects will not be as large as the overall effect of the cultural shift.  

(Changing the laws will also help change the culture, btw, so this is all tied together.)

The change is happening.  This event, as opposed to outraging me, is actually making me smile.  This is how real change happens.


[ Parent ]
who is in charge?? (0.00 / 0)
you said: as I said before, it could open up a serious economic credibility gap for the president - a credibility gap that might make people ask A) Who the hell is in charge? B) Since when did

Diane Rehm asked that question Monday


If I recall correctly (4.00 / 2)
David Axelrod wanted Obama to display a more populist appearance over the bailout issue last month, but lost that battle to the financial side of the team.  That kind of schism could be behind this as well.

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.

. (4.00 / 1)
He did display a more populist appearance. He decided to go after executive bonuses. That's put him on the hook for this. In that sense, Obama boxed himself in. BUT, the reality is exactly what Rahm says it is. Now instead of pushing the budget they have to answer the same question about AIG over and over again. It's a media generated hurdle that costs them about a week in pitch time. So now obama has to put out "i'm outraged that you're outraged, so now we're outraged" political nonsense.

Does that mean it's a nonissue. IMO yes, but I understand why people care, because if you don't change the culture of Wall Street here, then when and where. But at the same time, this is the definition of a red herring. It distracts from real political battles and it distracts from where the REAL money (as opposed to a tenth of a percent of the real money) is going.


[ Parent ]
If he doesn't go after the bonuses (4.00 / 2)
he gets beat up by the Republicans who, contrary to any logic, are completely willing and able to demagogue this issue to death.  The bailouts, which are where the real money is are more important but Republican long-term strategy is clearly to portray Obama as "out of touch with ordinary Americans."  Atmospherics matter!

You're right that "winning" this battle over the bonuses achieves next to nothing in real terms - but that doesn't matter.  People want to see this rotten system (I'm talking about Wall Street hyper-capitalist, risk-shifting, finance Uber Alles, not necessarily all forms of capitalism) taken down several pegs and while there's a case to be made for bailout, it's not particularly clear that the bailout as prescribed will actually work.  At any rate it can't be proven at this point.  Which is WHY atmospherics matter more than they would in a perfectly rational world.  But we don't live in a perfectly rational world.

sTiVo's rule: Just because YOU "wouldn't put it past 'em" doesn't prove that THEY did it.


[ Parent ]
questioning Obama's sincerity (4.00 / 3)
I think Obama is on the side of big banks and American corporations.  If he isn't, why did he appoint Summers and Geithner? There are many excellent economists who are independent of Wall Street.

While I voted for him, I will never forget my disappointment over his FISA vote.  At that moment, I realized that Obama may nibble around the edges of "Change", but he has no intention of really changing the status quo.

We need better Democrats.



Two points (0.00 / 0)
You are talking about $160 million vs. $80 billion which we have lent them, and we are planning to give them $200 billion in total.

Second, the AIG bonuses are something that people can grasp and get very angry about, but the problem to be solved is not the AIG bonuses. David would consistently be angry with the problem being the culture of entitlement, and this culture of entitlement has come about because of inequality based on finance, which Jerome has called the "Anglo Disease". That's a much bigger problem than $160 million.  

Darkness has a hunger that's insatiable, and lightness has a call that's hard to hear.  


will you read this please (0.00 / 0)
This may be very important ... at least to me  ... it may be but I don't know.  But I clicked on the link YESTERDAY from this story to read about rahm's story and then it brings me to this site (http://theplumline.whorunsgov.com/political-media/rahm-obama-believes-aig-mess-is-a-distraction/#comment-6204).  And then to read the original story linked from there, I linked on AN INTRIGUING GLIMPSE expecting to read about what rahm said.  But instead I get a story from the NY Times with zero information on it about rahm emanuel or what rahm emanuel said.   (I hit on both the obama and emanuel links too but they just bring you to some profiles of them).  Did they give me the wrong link or is rahm getting embarrassing quotes from him scrubbed from the NY Times?

Does anyone happen to have the NY Times article still up on their computer that they linked to earlier from the link above on whorunsgov?   In a tab or anything?   If you do, check to see if the article has the quote from rahm emanuel about him saying that obama saw this aig bonus situation as a distraction ... or anything about rahm emanuel.  And if so, check to see if it matches the same web address as this: (http://www.nytimes.com/2009/03/19/business/19bailout.html?hp).  Then if you would, print it into a .pdf file ... if you can, or just print it out on paper.  Because in this article in the above link AN INTRIGUING GLIMPSE, it doesn't have anything about him in it ... anymore?   It was about 3:30 AM EST Thursday when I pulled the article up.

IF ... and of course I do not know ... but IF they are scrubbing stories in the NY Times ... the same damn newspaper that allowed Judith Miller to let the last administration anonymously whisper into her ear and use her to perform propagandical stenography to market their damn war, then it is pretty fucked up that they are now scrubbing stories of embarrassing quotes from who is very likely the next administration's silent "press whisperer" ... at least in name if not volume ... probably on request.  It ought to be pretty damn embarrassing to the Times themselves if they are allowing themselves to be played like this again and take actions favorable to who is probably their newest reliable anonymous source .... or senior administration official ... or unnamed white house aide.

I'd like to know if they are showing favoritism to who is very likely their newest anonymous "press whisperer".

Z


I got with Greg Sargent and he told me he put the wrong link up (0.00 / 0)
Z

[ Parent ]
This is getting VERY interesting ... (0.00 / 0)
http://www.scrappleface.com/?p...

Obama, Dodd Outraged at AIG Campaign Cash
by Scott Ott for ScrappleFace · 69 Comments

(2009-03-17) - As the furor over AIG executive bonuses threatened to bring the current economic recovery to a halt, President Barack Obama and Sen. Chris Dodd today threw fuel on the fire, announcing their "fierce outrage" upon hearing that the insurance giant had given each of their campaigns more than $100,000 last year.

"While AIG was collapsing, and her executives crawling to DC with hat in hand," said Sen. Dodd, D-CT, "my campaign, and then-Senator Obama's were getting what can only be termed influence bonuses from the same firm. Naturally, I knew nothing about this, and I'm now seething with anger at the injustice."

President Obama and Sen. Dodd were the two largest recipients of campaign contributions from the beleaguered company, and the only politicians to garner six-figure amounts from AIG in 2008 - $103,100 for Sen. Dodd and $100,332 for presidential candidate Obama.

AIG, which has received $170 billion in taxpayer cash from the federal government since September, gave more than $585,000 to Congressional and presidential candidates last year, favoring Democrats 3-to-1 over Republicans.

In unrelated news, Sen. Dodd proposed legislation requiring AIG political gifts to be returned to the U.S. Treasury, "exempting only those campaign contributions made before November 4, 2008."

The senator's office immediately issued a statement declaring that Sen. Dodd was not aware that he had proposed such the exemption.

So, the two entities that came together and "compromised" on the bill and took out the provision that could have prevented the big aig bonuses from being paid out are also the two entities that got the most campaign contribution cash from the company ... routed from guess who?  US, our f'ing tax money/future debt!  They are taking our tax money to maintain their power structure.  How can this relationship not be considered as being one that has coalesced into being an adversary of the american people?

So let's review their money laundering/plundering operation:

Step 1:  The government (G) takes the money off us to rescue aig (A).

Step 2:  some decision makers in aig (A) feed some of the money back into election campaigns of our .. no, sorry ... their politicians in our ... sorry ... their government (G).

Step 3:  then their politicians (G) that decisions makers in aig (A) fed OUR money the most to, turn around and "compromise" on a bill that leaves a loop hole that allows some of those same decision makers in aig (A) get huge bonuses ...

... even though they (A) are the ones responsible for crashing our economy .. the world economy ... and (G) let them do it.  Which necessitated (G) stealing the original money off of us ...  money which they personally acquired a portion of after changing hands with it a few times before it finds itself resting comfortably in their pockets.  I guess that is what criminal organizations call washing money ... huh

AND WHY THE FUCK ARE THESE COMPANIES ABLE TO TAKE OUR TAX PAYER DOLLARS AND THEN TAKE THAT MONEY, OUR MONEY, AND FEED IT BACK INTO OUR POLITICAL SYSTEM TO USE AS LEVERAGE TO BRIBE OUR POLITICIANS SO THAT THEY CAN GET IT INTO THEIR PERSONAL POCKETS????!!!!!  AND WE WONDER WHY ALL THIS MONEY IS BEING SUNK INTO OUR ECONOMY AND YET THE ECONOMY GOES NOWHERE!!!!!  BECAUSE IT IS NOT GOING TO US ... OUR MONEY ... IT IS GOING TO THEM!!!  

Actually, more accurately they are stealing future tax dollars from us that we will pay a more immediate price for in the form of inflation as they inflate the money supply and grab the extra money coming in and ... since it does not make its way back to us ... our money is diluted.

Was this purposeful by obama and dodd?  I do not know ... but it looks pretty bad because the two people that happen to be so pivotal in making sure that the provision got removed, got the most money.  And they, dodd in particular, did not know that they were getting this much aig money in campaign contributions until now?  especially dodd ... it's money from his home state.  

But, regardless, this is what our system has devolved to: a thistle maze of corruption.  And this lays it bare and it looks very, very ugly lying ... probably in more ways than one ... naked.

can anyone keep a straight face and say that this is OUR government?  That this government is not in fact OUR ENEMY?  The development of this monstrosity is much, mucch more bush's and even clinton's fault than obama's, to be fair.  But this is what it is now: a cancerous growth between their government and themselves/the banking elites that not only steals wealth off of us but indirectly causes deaths amongst us ... suicides, broken families, broken relationships, and an overall poorer quality of lives as a result of the economic predicaments it puts our more vulnerable into.  And actually often our simply unluckiest.  They take so much off of us that people that want to make a living and work a productive job can't ... while they produce nothing but take everything they can.

And this is the same government that incarcerates us more than any other on the planet raw number wise and per capita wise with this country having 5% of the world's population and 25% of the world's prison population.  This government, which essentially is a corporate big business/wall street subsidiary ... more bluntly: a criminal operation specializing in murder, theft and fraud ... is not our government. It is our enemy.  It is our ruler ... and we are its subjects.

Welcome to AIGovernment ... the sticky hands people ... you are here for us.  

We are an insurance company that takes premiums from you so that in the event that we create a huge economic disaster, we can maintain our wealth and power order.  But don't worry, you don't have to send in the premiums, we take them from you ourselves with direct withdraw.  

AIGovernment ... it's ours and you paid for it.

And we also take your money at 0% interest and loan it back to you at 9%.

Z

 


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