Obama Bracing For Bailout Backlash

New York Times:

The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama's agenda.

The administration's sharp rebuke of the American International Group on Sunday for handing out $165 million in executive bonuses -- Lawrence H. Summers, director of the president's National Economic Council, described it as "outrageous" on "This Week" on ABC -- marks the latest effort by the White House to distance itself from abuses that could feed potentially disruptive public anger.

Read the whole story: New York Times

Comments

[ObjectiveRealist]

08:14 PM on 03/17/2009

President Obama,
We are outraged, but not at you. Keep up the good work, and thank you.

[Tanyars5]

08:59 PM on 03/17/2009

I luv Obama...he does no wrong!!!!!!
He is doing a great job!!!!

[ScoreKeepN]

02:21 PM on 03/21/2009

The buck doesn't stop there, I guess

[PhilipTaylor]

05:38 PM on 03/17/2009

Must SEE VIDEO on ABC:

http://www.youtube.com/watch?v=2ttVibYQfII

"CHANGE WE CAN BELIEVE IN" is NO MORE HOPING for "TRICKLE DOWN" LOANS from BANKSTERS and FED WHO RUN OUR LIVES!

Direct Government Banking to Consumers and Businesses at Low Current Rates and Low FEES, like the Welfare given to Wall Street! Bypass the Big WS Banksters until their CULTURE is CURED and they can be TRUSTED!

[PhilipTaylor]

03:43 AM on 03/17/2009

Citi and AIG Bonuses are SMOKE SCREEN by AIG, Banks, Bernanke, Geithner, and others!

CENTRAL GOAL: GET credit Flowing to Americans!

If that is GOAL then Obama should have Government open up direct LENDING Via telephone or the Internet to Small Business, Students, and Consumers at low RATES/FEES!

All Geithner/Bernanke are doing is saving Big Banks and FEATHERING THE NEST OF THE ELITES they work FOR!

NOT ONE CEO has Been FIRED, INVESTIGATED, FINED, or PROSECUTED!

All this BS about 1% is to stop Americans from seeing the Continuing $BILLIONS going to these Corrupt Banks and AIG!

Corrupt FED/BANKS still in control of Printing/Controlling OUR Government and making us the Largest Debtor Nation on Earth!
__________________________________________________________________________

The Fed/Treasury used $52.5 billion for off-balance sheet financing, $30 billion is a loan to Maiden Lane III LLC, an entity formed by NY Fed/AIG to purchase AT FACE VALUE $64.7 billion of "super senior" CDO tranches on which AIG wrote CDSs, to terminate the CDS agreements.

So Banks received a huge windfall on their CDOs at PAR, instead of owning illiquid securities worth pennies on the dollar.

http://johnappel.com/2008/12/12/aig%E2%80%99s-bailout-needs-a-bailout-a-150-billion-problem/

Why should Goldman, Morgan, BofA/Merrill, Citigroup, foreign Banks, and other Banks, who clear committed crimes get Funds from the AIG Bailouts?

It appears Geithner/Bernake are "IN BED with the Banksters" when they should be representing Taxpayers' Interests.

Remove FED's Money Printing!

[PhilipTaylor]

12:03 AM on 03/17/2009

Citi and AIG Bonuses are BS SMOKE SCREEN by AIG, Banks, Bernanke, Geithner, and others!

CENTRAL GOAL: GET credit Flowing to Americans!

If that is GOAL then Obama should have Government open up direct LENDING Via telephone or the Internet to Small Business, Students, and Consumers at low RATES/FEES!

All Geithner/Bernanke are doing is saving Big Banks and FEATHERING THE NEST OF THE ELITES they work FOR!

NOT ONE CEO has Been FIRED, INVESTIGATED, FINED, or PROSECUTED!

All this BS about 1% is to stop Americans from seeing the Continuing $BILLIONS going to these Corrupt Banks and AIG!

Corrupt FED/BANKS still in control of Printing/Controlling OUR Government and making us the Largest Debtor Nation on Earth!
__________________________________________________________________________

The Fed/Treasury used $52.5 billion for off-balance sheet financing, $30 billion is a loan to Maiden Lane III LLC, an entity formed by NY Fed/AIG to purchase AT FACE VALUE $64.7 billion of "super senior" CDO tranches on which AIG wrote CDSs, to terminate the CDS agreements.

So Banks received a huge windfall on their CDOs at PAR, instead of owning illiquid securities worth pennies on the dollar.

http://johnappel.com/2008/12/12/aig%E2%80%99s-bailout-needs-a-bailout-a-150-billion-problem/

Why should Goldman, Morgan, BofA/Merrill, Citigroup, foreign Banks, and other Banks, who clear committed crimes get Funds from the AIG Bailouts?

It appears Geithner/Bernake are "IN BED with the Banksters" when they should be representing Taxpayers' Interests.

[Tiggy]

09:52 PM on 03/16/2009

I don't want to hear the words "in the future" or "next time" when it comes to stopping these bonuses. The time is NOW! Paulson may have given them the first injection of capital without restrictions, but any additional injections should have contained serious restrictions, no ifs or ands about it. This is now Obamas watch and he should be worried. We are fed up with this nonsense. What other job can you totally scr*w up and not only expect, but receive a bonus! That in itself makes no business sense whatsoever!! And we wonder why the economy tanked? Personally, I think the tax payers own 80% of AIG and we say H*LL NO to bonuses, contracts or not. Let the company fail and they won't have to worry about paying "contractually obligated bonuses". Then their so called "need to retain employees" can join the rest of us in the unemployment line. Which would be better, a job sans bonus or no job no bonus? I would give those so called bonus eligible people a choice, Job without bonus or unemployment line. Bet they would forgo those bonuses pretty darn quick!

[Rule Of Law]

09:12 PM on 03/16/2009

Jailing these criminals, these petty actors in this drama, may be satisfying in the short term, but will change nothing. Though I welcome it.

It is the Banking and Financial Systems in America that are corrupt and destructive to the best interest of the Country. In that they weaken everything that the Constitution provides for, they are treasonous agents and should be dealt with as such.

These institutions need to be dismantled, entirely. And if we follow the money to the rulers at the top, they should be made to pay.

[clarryr]

05:32 PM on 03/16/2009

We are beyond the time to "limit executive compensation". It is time for these people to lose their jobs and the criminals among them to go to jail. They refuse to treat the tax payer funds responsibly so the full fury of the people should rain upon them. If they haven't gotten it by now they never will. No more benefit of the doubt, no more trying to preserve the current financial institutions. It is time to nationalize these institutions, sell off the operating parts to good banks, and auction off the toxic debts for whatever we can get for them. The proceeds can be used to pay back the tax payers and anything left over can be prorated to holders of the securities and the stock holders.

[azdirk]

04:38 PM on 03/16/2009

Although the bail out was Bush's baby, it is now Obama's problem. I hope he has the fortitude to stand up to these arrogant crooks and liars and demand that the American people be compensated for the pain brought on us by the leaders of the financial community. These people must be shown that they need to answer to someone other than their boards of directors.

[coultersnemesis]

05:12 PM on 03/16/2009

umm..while agree with your sentiment, it is unfair to characterize the bailout as only "bush's baby" as we all know Obama supported it, as well, as did top Dem leaders. It is ALL of the pols fault--both Dems and Repubs--for allowing unscrupulous companies to run amok due to the loose terms if the bailout bill and oversight and reporting requirements..i agree, though, as i did when obama supported the first bailout during the election, that some sort of intervention was/is necessary...but what needs to happen is the good banks (there are many receiving aid, not all are unscrupulous) need to be praised and worked with, and the bad ones and aig need to be held accountable..

[onenvrnos]

07:04 PM on 03/16/2009

I beg to differ. The culprit was deregulation, starting with the Gram/Leach/Riley dereg act slipped in at the end of Clinton's term. Right at that time, the GOP was slandering Clinton so that all of the public attention was geared toward the smear while the GOP made merry with doing whatever they wanted, however they wanted. Because of the success of the GOP smear, Republicans once again became the "majority" and Democrats hardly had a voice stronger than the squeek of a mouse. It hardly mattered whether Democrats were for or against the GOP stronghold that strangled this country. Those of us who knew better and NEVER voted for GW or "bought" the whole smear campaign shuddered at what had become our lost country. THEN GW, in interest of the GOP battle cry of small government and capitalism, took our economy from a balanced budget to a spending free for all on top of a war that cost billions. So please...though I think Dems are not specifically to blame for this mess, it was the Republicans that led the charge and buried this country. Make no mistake.

[shela88]

04:38 PM on 03/16/2009

"Lawrence H. Summers, director of the president's National Economic Council, described it as "outrageous" on "This Week" on ABC --"...I have news for Mr. Summers: Bette Midler is "outrageous"..AIG is a disgusting example of corporate greed!

[LynnW49]

05:54 PM on 03/16/2009

Very good. Made me laugh.
The language reveals how empty their righteous indignation really is.

[thegirlnextdoor]

04:12 PM on 03/16/2009

Well, I do wonder who is in charge.
I also wonder now about Obama.
Who is he really. What kind of stuff is going to pop up now?
He has surrounded himself with big money folks as advisers.

In addition to letting this big money grab slip past him, he has turned around 100 degrees on Guantanamo.

We are still dancing to "getting to know you" with him. And I am starting to get uncomfortable about the agenda..

[SoCalAmerican]

05:04 PM on 03/16/2009

He has been consistent with his agenda since the campaign. Any person that voted for him and supported him has held in accountable for taking action the promises he has issued during the campaign and he has taken action.

Its pretty obvious you did not vote for him.

"getting to know you" with him?" have you been under a rock? He's been in the public light for 2+ years.

[coultersnemesis]

05:13 PM on 03/16/2009

I agree. Obama has always been pro-gov intervention. I agree with this approach. I also agree that the bailout are necessary but that there should be more oversight and transparency, something that Congress and Treasury and the Fed need to work on.

[ConfuciusSay-]

05:08 PM on 03/16/2009

"getting to know you" huh?
As in : "Who is the real Barak Obama?"

What an old talking point.
Didn't you get the memo? The election is over, and those rumors lost.

[davidwayneosedach]

03:54 PM on 03/16/2009

AIG has literally spit in Obamas face. They need to be taken down a peg starting with a freeze on all bonuses.

[SoCalAmerican]

05:04 PM on 03/16/2009

Have a little more faith in your administration that why the middle-men media feed you.

[Marie62866]

03:39 PM on 03/16/2009

Bush started the whole bank bailout! People should be outraged with Bush! Obama was handed a mess and Bush even made matters worse before he left. Hey Bushie, how's living in the multi million mansion going?

[coultersnemesis]

05:16 PM on 03/16/2009

I like Obama and support him, but it is unscrupulous to claim that Bush "started the bank bailout" and only blame him when Obama supported it, too, as did many Dem. leaders. I actually agree that the bailout was needed, but i also agree there was not enough provisions to ensure that some 'bad' companies wouldn't be able to screw the taxpayer (not all did) and we can never know how bad and how deep in c r a p we would have been right now if not for the gov. intervention. care to hypothesize?

[Tiggy]

09:57 PM on 03/16/2009

Absolutely! I agree, this is Obamas watch now. We can blame the Bush admin for their shortcomings, and there were many, but we can't blame them for everything. Some of these greedy companies have received numerous cash injections...and not all during the Bush reign.

[Carolab]

03:26 PM on 03/16/2009

Here's a great journal at DailyKos if you want to understand what's been going on and why we should stop the AIG bailout.

http://www.dailykos.com/story/2009/3/5/11129/31152/953/704855

Quote:

A bankruptcy judge could have carved AIG up into chunks with sound components separated from unsound ones. Other companies would buy assets that had value. Shareholders would likely have emerged in better shape than they have after AIG's stock price fell from over $70 to 43 cents in a two-year period.

"Suppose AIG goes bankrupt, it is better that AIG goes bankrupt and we have a horrible two or three years than that the whole US goes bankrupt," legendary investor Jim Rogers, who co-founded the Quantum Fund with George Soros, told CNBC on Tuesday. "AIG has trillions of dollars of obligations, let them fail, let the courts sort it out and start over. Otherwise we'll never start over."

One aspect of the repeated AIG bailouts that deserves additional public scrutiny is how they enriched some of the company's counterparties at taxpayer's expense. Those are the bailout's indirect beneficiaries, and they reportedly include Goldman Sachs, Merrill Lynch, UBS AG, and Deutsche Bank AG. They knew there were risks to dealing with AIG; the financial world would not end if AIG defaulted. (As George Mason University economics professor Tyler Cowen put it this week: "No one wants to say it, but essentially the Fed has been bailing out European banks.")

[ConservativeHippie]

03:46 PM on 03/16/2009

Love your posts carolab.
END the FED!!!

[Carolab]

05:15 PM on 03/16/2009

http://www.endthefed.us

END THE FED!

[coultersnemesis]

05:16 PM on 03/16/2009

You are delusional.

[PhilipTaylor]

04:37 PM on 03/16/2009

The Chart from your link that explains the flow of Money and Obligations and how Government could change that:

http://s218.photobucket.com/albums/cc91/the_show_2007/?action=view¤t=AIGChart2.jpg

[patsydecline]

03:24 PM on 03/16/2009

the aig bailout is like going on a bread and water diet while we build an arc for the perpetrators ,fill it full of caviar, while the water rises above our neck.

[lesterbud]

03:33 PM on 03/16/2009

One of the best analogies I have read.
Doesn't make me feel much better for some reason.

[jeannie35]

03:15 PM on 03/16/2009

Clearly there needs to be nationalization of the companies that are receiving huge amounts of bailout money. Sadly, the Republicans have shouted Socialist for so long that there are many who believe this propaganda. Obama administration is sure in tough spot, needing nationalization, but cannot proceed because it would not only be political suicide regarding reelection, it would also put an end to virtually all other reforms of education, health care, and unionization that Obama hopes to address. Damn, they have won again - those basta**s! And now with the new found chutzpah that the 20 or so "blue dog democrats" have discovered, I only hope Obama is truly masterful at political ability. Yeah, these new Democrats want fiscal responsibility, suddenly, when they had no voice at all for the last 8 years, and, now, suddenly, when they have a popular and intelligent democratic president, they want to begin implementation of fiscal responsibility - shooting ourselves in the foot again, and again, and again..... Maybe Democratic leadership should have learned a thing or two from Delay and Gingrich.

[HyperInfluential]

03:20 PM on 03/16/2009

Rahm will find a way. Have faith! He's way smarter than those GOP goons.