Huffingtonpost founder Arianna Huffington and her website the Huffingtonpost scored a one two punch to the Obama Administration's handling of the economic crisis today. First, in one of the most scathing interviews I have ever seen on the Larry King show, she called the Obama administation "impotent" on the economy. She credited Andrew Cuomo--the New York State Attorney General-- as being the only one who had actually done something. She skewered Timothy Geithner, Larry Summers and called for Obama to fire them as soon as possible. Then, in an article "Wyden: My Bill Could Have Prevented AIG Mess" by Sam Stein posted on her website, it was demonstrated that it was the Obama administration which had opposed the Democratic senator from Oregon's proposed bill to tax any bonuses such as AIG's at a 35% rate.
I. Huffington's Dynamite Interview on Larry King.
Let's look at Arianna Huffington's Larry King interview first and then examine the article on Sen. Wyden's proposal that was opposed by the Obama administration. On Larry King live on CNN, Huffington first paid tribute to the Obama administration saying it is doing well in "many other areas" but not on the economy. Huffington, who has an MA in Economics from Cambridge University in the UK, minced no words. She called the Obama administration "impotent" in dealing with the AIG bonuses and the economy. She said Larry Summers, who recently said nothing could be done about them because they are contractual, is "out of touch." Huffington noted this is so because "One of the reasons is that the people like Larry Summers and Tim Geithner were there from the beginning." Summers was there in 1979 when deregulation began and Geithner has been around a long time too, she noted. The problem is not just the "toxic assets" of these firms in trouble but the "toxic thinking" of people like Geithner and Summers.
Also on the program was Ben Stein, a business reporter from the New York Times. Stein named three people mainly responsible for the crisis: Geithner and Bernanke (now head of the Fed) and Paulson. He said:
"Geithner doesn't know what he's doing. ...He's a creature of Wall St." And, "the US taxpayers are essentially paying out the casnio bets of AIG."
A panel discussion followed and then Larry King asked Huffington, what sould be done? She said this:
"Obama must tomorrow, not the day after, make it clear that if AIG doesn't return the bonuses, AIG will not get the the $30 billion as the last installment of the bailout...The government can rescind the contracts and demand the money back. It is important for the President to act. It's his defining moment."
And at the conclusion of the program, Huffington called for the firing of Geithner and Summers:
She said she is "not optimistic about the banks," and continued: "there has been no transparency, it took Andrew Cuomo to do something." Huffington's final statements were: "sooner or later Obama must get rid of Geithner and Summers, the sooner the better."
NOTE: I myself transcribed Huffington and Stein from video clips at www.huffingtonpost.com There may be one or two minor mistakes. By the way, this was the first time I have seen Arianna Huffington speak and she is extremely articulate and better looking than Kos.
II. "Wyden: My Bill Could Have Prevented AIG Mess" article by Sam Stein at the Huffingtonpost.com
Earlier in the day, the Huffingtonpost scored a body punch to the Obama administration. In an article by Sam Stein, Democratic Sen. Ron Wyden of Oregon pointed out that he had earlier proposed a bill imposing a 35% tax on any bonuses such as those given by AIG BUT THAT IT WAS OPPOSED BY THE OBAMA ADMINISTRATION:
"Senator Ron Wyden said on Tuesday that the furor surrounding AIG's bonus payments could have been avoided had the Obama White House and members of Congress simply backed legislation that he and Sen. Olympia Snowe introduced more than a month ago.
In an interview with the Huffington Post, the Oregon Democrat noted that during the crafting of the stimulus package, he and his Republican colleague from Maine introduced a provision that would have forced bailout recipients to cap their bonuses at $100,000. Any amount paid above that would have been taxed at 35 percent. The language made it through the Senate, but during conference committee with the House, it was inexplicably removed.
"The reality is, had that legislation been passed it would have been a very strong disincentive to anybody paying out bonuses in the future," said Wyden. "Earlier, the President had denounced those bonuses that came at the end of the year. And when Senator Snowe and I said it is not enough for those in elected office to say it was wrong, that they have got to have a plan to have them pay it back, we were able to get legislation through the United States Senate. Not a single United States Senator was willing in broad daylight to stand up and oppose our bipartisan amendment... but it died in conference."
Looking back, Wyden laments the missed opportunity, saying that it remains unclear who got the language stripped -- "it didn't die by osmosis." (Feel free to send along tips on who killed the provision.)
Moreover, Wyden says frankly, the Obama administration should have been better prepared to handle what was an inevitable political train wreck.
"I will say that I talked to most of the key members of the Obama team and I was not able to convince them of the value of the amendment that I authored with Senator Snowe," he recalled. "I think it is unfortunate. I think it was an opportunity to send a careful, well-targeted message, which would have communicated how strongly the administration felt about blocking these excessive bonuses. I wasn't able to convince them."
Source: http://www.huffingtonpost.com/...
In short, the Obama administration knew months before the latest brouhaha on AIG bonuses that such bonuses would be paid (Geithner after all was intimately involved in TARP as Paulson's assistant and so was Obama) and even opposed an effort BY A DEMOCRATIC, PROGRESSIVE Senator from Oregon to do something about it! That is mindboggling. It is also mindboggling that Obama continues to stand by the ethically challenged Geithner, who as former President of the New York Reserve Board before his appointment, was a champion of deregulation and saw no storm clouds on the financial horizon.
I have consistently pointed out Geithner's shortcomings here at Dailykos. I mention the following diaries not to beat my own drum but because they contain lots of information (much of it in the posts from informed readers that follow the diary) about Geithner and the economic crisis for interested readers. For more information, please see:
- "Geithner Shafts the Public Again" at http://www.dailykos.com/...
- "Executive Salary Cap Loopholes: Remember Geithner is Writing the Caps" (predicting what happened with AIG) at http://www.dailykos.com/...
- "Obama: Cut Geithner Loose!" at http://www.dailykos.com/... diary looks at Geithner's background of incompetence especially as President of the New York Federal Reserve and quotes pie-in-the-sky statements from Geithner as late as March 2007 (when Geithner was still a champion of market deregulation and saw no storm clouds in the financial markets).
Meanwhile, Amy Goodman at www.democracynow.org reports that banks under Geithner's tenure as Treasury Secretary are actually decreasing lending after the bailouts (the opposite of what Geithner and Obama told us they should be doing):
Treasury Report: Banks Decrease Lending After Bailout
A new Treasury report has found the nation’s largest banks are continuing to reduce the flow of credit to new homeowners and consumers despite receiving hundreds of billions of dollars in taxpayer bailouts. In December, the nation’s twenty-one largest banks lent out $162 billion for first mortgages. Less than half that amount was lent out in January. New home equity credit lines decreased from $15 billion to just $5 billion.
Source: Amy Goodman, Headlines of Show of March 17th, 2009, at http://www.democracynow.org/...
In conclusion, I think Arianna Huffington's very frank and very critical remarks today and at her website demonstrate that some of our leading thinkers and influence shapers have not abandoned critical thinking. Perhaps we should also thank Jon Stewart after he took apart the financial reporting networks AND demonstrated that there is a market and an audience for tough, critical journalism. I also follow Huffington's call for the immediate firing of the ineffective and tied-in-to-the-Wall St.-thinking duo of Timothy Geithner and Larry Summers. The Obama administration needs the best help and advice it can get for us to pull out of this economic quagmire: there are much better people out there than these two Wall St. cronies.