“Do we really have to foot the bill for those bonuses at the American International Group?” Andrew Ross Sorkin writes in the New York Times.
“It sure does sting. A staggering $165 million - for employees of a company that nearly took down the financial system. And heck, we, the taxpayers, own nearly 80 percent of AIG.
“It doesn’t seem fair,” Mr. Sorkin said.
“So here is a sobering thought: Maybe we have to swallow hard and pay up, partly for our own good. I can hear the howls already, so let me explain.
“Everyone from President Obama down seems outraged by this. The president suggested on Monday that we just tear up those bonus contracts. He told the Treasury secretary, Timothy F. Geithner, to use every legal means to recoup taxpayers’ money. Hard to argue there.
” ‘This isn’t just a matter of dollars and cents,’ he said. ‘It’s about our fundamental values.’
“On that last issue, lawyers, Wall Street types and compensation consultants agree with the president. But from their point of view, the ‘fundamental value’ in question here is the sanctity of contracts.
“That may strike many people as a bit of convenient legalese, but maybe there is something to it. If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.”
WHERE IT WENT
“Barack Obama‘s lack of leadership in a down economy has now hit crisis proportions, as his claimed inability to block millions of dollars in bonuses for executives of bailout recipient AIG has caused even his supporters to turn on him,” Bob Owens writes in a blog at www.pajamasmedia.com.
“But while the ire of Congress and the media focus are on the $165 million that AIG paid out in bonuses to their executives, the president is hoping you won’t notice the $100 billion in taxpayer bailout dollars that AIG paid out to other banks, including $58 billion to foreign banks and $36 billion given to French and German banks alone. …
“And of course, the re-distributor-in-chief hopes you won’t notice where much of the rest of the AIG bailout cash is being spent.
“While $58 billion of your tax dollars - or more accurately, your children’s tax dollars - are being used to pay foreign banks, a substantial portion of that money ($43.5 billion) is being used to pay American banks, including Goldman Sachs, Merrill Lynch, Bank of America, Citigroup, Wachovia, Morgan Stanley, AIG International, and JP Morgan,” which ranked among Mr. Obama’s top campaign contributors.
“President Obama often campaigned as a trade warrior, and now he’s getting his wish,” the Wall Street Journal says in an editorial.
“Mexico announced [Monday] that it will raise tariffs on 90 U.S. products, affecting some $2.4 billion in goods across 40 states. The move was retaliation for the recent decision by Congress, signed into law by Mr. Obama, to close the Southern U.S. border to Mexican trucks,” the newspaper said.
“Proponents cloaked the decision in safety language, insisting that the Mexican trucks are a road hazard. However, a federal pilot program has shown that Mexican trucks actually have fewer violations than do American. The real hazard here is the new administration’s obeisance to the Teamsters, who endorsed Mr. Obama early in the 2008 Democratic primaries and demanded the trucking shutdown. …
“By rejecting Mexican trucks, the Administration violated the North American Free Trade Agreement and picked a needless fight with a good neighbor. The White House scrambled [Monday] in the wake of the Mexican announcement, saying it wants to work with Mexico to come up with a new trucking plan. But unilateral treaty violations aren’t the way to get other nations to negotiate concessions.
“President Obama may think 90 products is no big deal, but from such little tariff fights do larger trade wars sometimes develop. Especially in a time of economic hardship, populist and nationalist passions are dangerous and can be hard to control. Mark this episode as another early example in which Mr. Obama has refused to stand up to a powerful Democratic interest group, with damaging consequences.”
“The Obama administration has offered to talk to America’s enemies across the globe, especially in the Middle East. So far, though, the offer has few takers,” New York Post columnist Amir Taheri writes.
“Iran has called for ‘substantial changes in U.S. foreign policy” as a precondition for talks. Syria wants the U.S. to shut down the U.N. investigation into the murder of Lebanese ex-Premier Rafiq Hariri and insists on reviving its domination of Lebanon before ‘substantive talks’ with Washington. The Taliban insists on ‘the complete withdrawal of foreign troops’ from Afghanistan before it will consider talks,” Mr. Taheri said.
“Well, if your enemies won’t talk to you, why not talk to your friends? But this is precisely what the new administration doesn’t want to do - for that would look like continuing the Bush administration’s ‘failed policies.’
“Notably, President Obama did not respond to greeting messages from America’s Mideast allies until weeks after he’d entered the White House. The Iraqi leadership had to wait three weeks. Afghan President Hamid Karzai waited 40 days. Leaders of traditional allies such as Morocco, Egypt, Turkey, Jordan and Saudi Arabia didn’t wait as long - but got only protocol calls devoid of political content.
“Obama’s emissaries to the region have made it clear that the new administration is keener on cultivating its foes than courting its friends.”
WAIT AND SEE
“Curious storyline in the national press: that the resurgence of populist sentiment is directed at Barack Obama‘s government and could complicate his political agenda,” the Atlantic magazine’s Marc Ambinder wrote Tuesday in a blog at theatlantic.com.
“I don’t think the evidence gets us there just yet. For one thing, my colleague Mark Blumenthal reminds us that displeasure with the banks and financial institutions is already fairly well determined, the public is already dissatisfied with how government is overseeing the bailout, and that the public channels that anger into increased support for tougher financial regulation and more oversight of the industry - which just happens to be a big part of Obama’s agenda,” Mr. Ambinder said.
• Greg Pierce can be reached at 202/636-3285 or Greg Pierce