White House’s Credibility Gap Reaching Crisis Level
The first thing I thought after reading this article is that the White House must think that political activists don’t do Google searches. Here’s what ABCNews is reporting:
Sources in the Obama administration Tuesday said that despite previous media reports administration officials did not know until a couple weeks ago that the officials of the controversial AIG Financial Product Division were set to receive $165 million in bonuses on March 13.
It wasn’t until Monday, March 5, 2009, administration sources told ABC News, that officials of the Federal Reserve Bank of New York informed officials of the Treasury Department of the full extent of the $165 million in bonuses pending for the controversial Financial Products Subsidiary.
This was three days after the Obama administration had already announced a new commitment of an additional $30 billion for AIG.
It’s rather amazing that they’d make such a statement considering what the NY Times reported last November:
“All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.”
Ouch.
“He was in the room at every turn of the crisis,” said another executive who participated in several such confidential meetings with Mr. Geithner. “You can look at that both ways.”
While Henry M. Paulson Jr., the current Treasury secretary, has taken a drubbing for the changeable nature of the government’s efforts to bolster the financial industry, some of which clearly contradicted each other; Mr. Geithner has managed, for the most part, to remain unscathed. He’s been widely praised as a bright, articulate out-of-the box thinker who is a bailout expert, to the extent anyone can truly be an expert at fast-changing emergencies.
Behind the scenes, Mr. Geithner was the point person for weeks of sleep-deprived Bailout Weekends. It was Mr. Geithner, not Mr. Paulson, for example, who put together the original rescue plan for the [AIG].
That’s an awful lot of detail for the White House, and Mr. Geithner, to refute. Brian Faughnan, who participated in today’s blogger conference call, thinks that Geithner’s days are numbered:
Today I had the opportunity to talk to Congressman Kevin McCarthy when he addressed the Heritage Foundation’s conservative blogger briefing. I asked McCarthy how House Democrats view Tim Geithner, based on his conversations with his colleagues across the aisle.
McCarthy said that Geithner was in ‘dire straits’, that he had blown his first impression, came across as the ‘man with the plan’ who had none, and now was getting mocked by Saturday Night Live. The AIG mess would only worsen his situation. As McCarthy pointed out, Geithner needs a strong support team to have a chance to turn things around, but seems unlikely to get one anytime soon. According to McCarthy, that seems to be the view of House Democrats as well.
Another bit of proof that the end is near is that Geithner got the kiss of death today:
If there was any doubt the White House is feeling the heat over Treasury Secretary Timothy Geithner’s role in the AIG bonuses, Press Secretary Robert Gibbs gave a big clue Tuesday.
“The president has complete confidence” in Geithner, Gibbs told reporters.
In Washington terms, “complete” and “confidence” are the two words no public official ever wants to hear, often a harbinger of trouble. And with public and congressional fury growing over the $165 million in bonuses, Geithner’s role in the situation is getting close scrutiny.
As Brian rightly points out, coaches start cleaning out their lockers and polishing up their resumes when they get that fatal vote of confidence. That’s the signal that the light at the end of the tunnel is a freight train, not a source of optimism.
The then and now transcripts from Robert Gibbs’ White House briefing just shrinks the White House’s credibility:
THEN:
Jake Tapper, ABC: AIG, is the Administration confident that it, that it knows what happened to the tens of billions of dollars previously given to AIG?
Press Secretary Gibbs: Is it confident - I’m sorry?
Jake Tapper, ABC: That they know, that you guys know what happened to the previous billions before you hand over this next $30 billion?
Press Secretary Gibbs: Yes.
That was then. Here’s this week’s answer:
Question: Did you guys first find out about these bonuses last week?
Press Secretary Gibbs: I think that’s true, based on what I read in the newspaper…
Question: But, Robert, to follow up on Jake’s point, did Secretary Geithner make a mistake by not reviewing these contracts; they’re a year old; before he cut a new check to AIG? Why didn’t he do that?
Press Secretary Gibbs: I would certainly ask the Treasury; I’ll ask the Treasury that.
QUESTION: Which whopper is Mr. Gibbs going to stick with?
BETTER QUESTION: Will Mr. Gibbs stick with one answer?
BEST QUESTION: Does it matter? It isn’t like we’ll trust anything that Gibbs, Geithner or this administration says anymore. After all, this administration’s credibility is shrinking as fast as the national debt is exploding.
Technorati Tags: Bailouts, Bonuses, Tim Geithner, Robert Gibbs, Federal Reserve, President Obama, Credibility, Due Diligence, Kevin McCarthy, Fiscal Restraint, Conservatism
Cross-posted at LetFreedomRingBlog
March 17th, 2009 at 11:05 pm
BO (Barack) is Livid that AIG is spending less than 0.1% 170 million on bonuses when the Democrat Congress Spent 4-6 Billion on Earmarks,(1-2%) which are essentially the same as a LOCAL BONUS. Barack said the Repubs were just playin politics over little or nothing?????? Two faced side winding snake. I voted for him and expected something like REAL CHANGE but all WE got is the worst of all politicians, the Chicago Machine is running (ruining) our country tell them what they want to hear, do whatever you want, screw the middle class dummies, they deserve it.
God help us all, me and my wife just can’t afford the $44,000 in new debt we got from Barack and the Demo’s. Hell fire just give us that money we’ll actually spend it and stop the recession right now, RIGHT NOW.
March 17th, 2009 at 11:48 pm
I am just sick over all of this - my best friend just got laid off from the oilfield industry - because God forbid the gov’t consider giving the guys in THAT industry. Not ALL of the business involved in the industry are the Exxon’s, Mobile’s, Chevron’s etc …. I’m sure if anyone crunched some real numbers they might learn that oilfield related jobs account for as much if not more than the automotive industry our gov’t wants so badly to bail out. OH WAIT - they aren’t fully unionized so the oilfield workers can’t promise mass voter turn out. It doesn’t help that he is a single dad and the sole source of income & health insurance for his 8 yr. old son. My brother has just been informed that as of April 1, he will no longer be on active duty with the Air Force because “funding for the project has run out”. So NOW our military is laying people off. His contract that he is OBLIGATED to fulfill has now been cut because the gov’t is cutting back. BUT if they decide they want to send him to war, I am sure the gov’t will be more than happy to re-instate his active duty status. Forget the fact that he’s been ready and willing to serve in whatever capacity saw fit to best utilize his skills. So if I understand this, our Gov’t can fork over BILLIONS UPON BILLIONS to the bank executives - but can’t afford to pay their military for projects that have been up and running and are now being left incomplete. What in the world is happening to our country. Our gov’t can pick which businesses are worthy of saving. They can take my money & “spread the wealth” around a little. Because as a single woman without children - I ran the numbers for the tax breaks they are handing out for 2009 and since I have been a responsible adult, paid my bills, took out a SMALL mortgage that I could AFFORD at the time, I didn’t have child after child in the 18 years I have been out of school - I get to fund life for the rest of the country. YES I do believe that the programs such as welfare, medicaid, food stamps etc… have a place in our society - I hate the abuse that is rampant and the double standards by which money is doled out. I AM JUST DISGUSTED BY IT ALL. Sorry for the rant - but I’m sick of watching the wolf trying to pull the wool over our eyes.
And while .1% of the BILLIONS did turn into $165 million in bonuses for executives. It appears that 50% went to overseas banking. Thank you AIG for funneling money to God knows who.
All hail the cheif (cough, cough) Would be easier to raise him up to that level of respect if it were easier to tell who is really running this country, our current elected President or all the same political hacks who have been running congress all these years helping to create the current financial situation (Barney, Pelosi . . . . it’s an endless list). They can fake their anger and outrage at AIG’s offensive actions but their acting couldn’t make it through a high school drama department. Obama and his Chronies are all Phonies. Obama is exactly what he proclaimed NOT to be, what he wanted to CHANGE about our gov’t. So much for change, so much for hope. We’ve lost hope, now we just get to wait and see what happens.
March 18th, 2009 at 12:00 am
Cleats, buyers remorse is a bitch isn’t it. Obama’s character and personality as well as his beliefs was already a well known fact even while he was just emerging as a “superstar” (do nothing) senator. You discounted my vote due to your lack of research and understanding. YOU/we got what we deserve…stop complaining and start doing something about it.. spread the word, we can still fix this. Get this guy and the rest of these dummies out of office.
March 18th, 2009 at 12:18 am
I can only hope that our nation survives in tact for the next 2 years until we can flip congress on it’s end and put some intelligence back in there. And I absolutely HATE feeling so negative - I am a cup’s half full - always optomistic person. And right now I feel things are grim, and getting worse by the day. I really am afraid for the future of our country. I am afraid of what changes will take place in our nation’s fabric. I know that we can fix things down the line - if there is anything left to fix, but for the first time in my life, I’m afraid for our governments future (I’m 36).
March 18th, 2009 at 12:26 am
The one thing about posers is that they can only go so far carrying their own baloney before they can’t handle it anymore. Obama is the biggest poser there is, I just sit back, watch and listen because eventually he will break down and can’t carry his on BS.. You notice that he can’t speak worth a damn on his own intellect and own two feet, he is codependent on those teleprompters to a fault. He can’t even answer a question without being rehearsed first, that’s because he is an empty suit. Don’t lose hope, the best is yet to come and just watch the comedy show while it’s still in session. It’s just too bad that we have to suffer as a county through this comedy show.
March 18th, 2009 at 11:03 am
All I want to see is business operating as it should. Business is risk. If it fails, it fails, and no profit, no bonus. The corporate guaranteed income and payouts has got to stop.
March 18th, 2009 at 1:18 pm
The AIG crisis is revealing what is really wrong with our society - People becoming stinking rich at the expense of others and those less fortunate. Ask Bernie Madoff, he knows a little something about the subject. But has it ever in any of our lives become so flagrant and digustingly true? The cheezy executives won’t return the money, and because of their contractural agreements, nobody except the cheezy executives will ever see that money again. I’m more interested in the timeline of events that allowed the bailout money to be dispersed to AIG in the first place and who (the POTUS and your beloved career politicians) really allowed this to happen?
Politics as usual! The only thing different about your beloved President Barak Obama is his skin tone - nothing else. Change, what chage? As soon as nominees for various cabinet positions began dropping out like flies for not paying their taxes I knew we were in trouble. And by the way, if your average citizen “forgot” to pay his taxes his wages would most definitely be garnished, he would be fined, and finally be thrown in prison for tax evasion. Well, here in this wonderfull country of ours if you’re a scumbag politician that “forgets” to pay his taxes you can receive a Presidential nomination to run the Treasury Department. That makes sense!!
Please God help us, because we surely can’t rely on our Government - their to concerned about getting re-elected by taking money from lobbyist and special interest groups in the Insurance and Financial Market industry.
March 19th, 2009 at 3:57 pm
Brian, I agree with a lot of what you say, but disagree vehemently with your initial premise. The only way to get “stinking rich” (as you put it) is at the expense of others. But, you see, everyone ought to have the opportunity to be that “stinking rich” person.
Where I go off is when, to get “stinking rich”, they have to cross a moral, ethical or legal line. Madoff is a classic example, but certainly not the only one. I don’t believe he is any more guilty than the regulators who fell down on the job for TWENTY-EIGHT YEARS! That, to me, is as obscene and deserving of legal punishment as Madoff’s crimes.
Same with the mortgage crisis. People like Dodd, Frank, Obama, Schumer, and Obambi’s revolutionist friends are as guilty as any AIG exec, or Citi, or BoA, or whoever.
Bottom line, it is not only the thieves but the guard dogs who should be held equally responsible. Personal opinion, of course.
March 20th, 2009 at 12:48 am
and the plot thickens. 13 companies owe back taxes to the tune of a combined $220,000,000 and had to sign statements when they excepted their “TARP”/bailout funds - sworn statements that they owed NO taxes - yet hmmm, they do. 2 of those companies owe over 100,000,000 in delinquent taxes (each). Lovely - they don’t pay taxes into the system (contribute) but they are more than willing to suck it dry. We have gone from a welfare state that hands out checks to the tune of $400 - $500/month for a family to handing out checks in excess of $1,000,000,000. Lovely.
And now the House has decided “we don’t like how you legally (although lacking ethics) obtained your funds - so we are going to charge you a 90% tax on those funds. Does that mean if our lefties who want to shut down the dirty oil industry can arbitrarily decide next week that since they don’t like people making money off of oil, they can levy a 90% tax on all oilfield workers 2008 wages. Because that is the precedent that they are setting. And they want to suggest that Bush sidestepped our constitutional rights by inacting homeland security laws. I’m sorry but I don’t mind government listening to my phone calls (they would be very bored) it doesn’t bother me. Government deciding they don’t like where my income came from, and within 24 hours turn a vote to levy a 90% tax on my income - that bothers me. I know it has to go through the senate still, but I am just wondering who will be the first lemming to step out of the pack and do something other than follow the rest off the cliff. This reminds me of the cartoon where a group shuffles (in a mass huddle) from one side of a ship to the other, and as they get to each side it tilts to sink so they have to shuffle to the other side. Our government is OUT OF CONTROL they have all lost their minds! AND they want to publish a list of who received the bonuses. Seriously? Someone will end up dead because there is such a fury over this. This is awful. Those people probably did not use the BEST of judgement in excepting the bonuses from AIG - but you know - it’s not them I blame, I blame congress for setting up the situation and pounding these bailout bills through so quickly that loopholes were left open, and I blame AIG for not bringing these people to the table and trying to negotiate their way out of paying the bonuses right now. This scares me even more. Now congress thinks that it can just DECIDE in a day “We don’t like where your money came from so we are going to tax it away”.
I PROMISE YOU PEOPLE, IF THEY GET AWAY WITH LEVYING A 90% TAX ON BONUSES RECEIVED FROM AIG - THEN WE HAVE JUST GIVEN THEM THE RIGHT TO MAKE THE SAME DECISION ABOUT YOUR PAYCHECK —- THIS SCARES ME MORE THAN ANYTHING ELSE I HAVE SEEN SO FAR.
Personally - I think there needs to be a moritorium on congressional decision making. ALL OF THEM NEED TO TAKE A STEP BACK TAKE 10 LONG DEEP BREATHS, THEN GO FISHING FOR A WEEK. Let the dust settle, and come back with a clear head and set down and talk for a week - THEN present a bill with a solution to write into law, right now everything is such a frenzy - they will leave more loop holes in this new tax law - loopholes that allow people to not pay any tax on the bonuses - to loopholes that allow them to decide to take this action with anyone they choose in the future.
UGH WHAT IS THIS COUNTRY COMING TO???????
Losing HOPE
March 21st, 2009 at 11:32 pm
Well, the 90% tax bill passed by the House this week is a bill of attainder and specifically forbidden by the Constitution. Now, let’s see how many judges His Hollowness has bought off that give it a pass before it gets to the SCOTUS.
Makes ma wonder which constitution they study at Hawvud Law? ‘Course, PM Pelosi was the only one capable of scribbling that nonsense that fast, so either she wrote it or had a team of third graders do it as a class project for BO’s Constitution class.
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