Paul Krugman is back from Europe, and he comes out swinging in a blog post Friday. Of the bill that passed the House yesterday that would tax bonuses given to executives of bailed-out companies, Krugman said, "It's not the way you should make policy -- it's clumsy, and it will punish some innocent parties while letting the most guilty off scot-free."
But, Krugman adds, "But -- there wasn't much alternative at this point. And for that I blame the Obama people." He goes on to call the Obama administration's handling of the American International Group scandal "bad analysis, bad policy, and terrible politics" that makes it seem as if the White House is "owned by the wheeler-dealers."
The New York Times reported Friday that many in government knew about the bonuses weeks ago. Treasury Secretary Timothy Geithner admitted Thursday that he pushed for the loophole in the stimulus bill that allowed bailed-out executives to receive bonuses.
Republicans in the Senate, meanwhile, have vowed to slow the anti-bonus bill.
"If legislation is going to be proposed, who all should it apply to? Can it be written in a broad enough fashion to not violate the Constitution?" asked Senate Minority Whip Jon Kyl, R-Ariz. "Until we have hearings and understand all of this, we're not going to know what kind of fix to implement."