Via Glenn Reynolds.
And from the New York Times, of all the fishwrap in the world, after taking some populist, stupid and unjustified swipes at the people trying to clean up the AIG book
And Congress, with its howls of rage, its chaotic, episodic reaction to the crisis, and its shameless playing to the crowds, is out of control. This week, the body politic ran off the rails.
There are times when anger is cathartic. There are other times when anger makes a bad situation worse. “We need to stop committing economic arson,” Bert Ely, a banking consultant, said to me this week. That is what Congress committed: economic arson.
How is the political reaction to the crisis making it worse? Let us count the ways.
IT IS DESTROYING VALUE - ...Treating all of A.I.G. like Public Enemy No. 1 is a pretty dumb way for a majority shareholder [the american taxpayer] to act when he hopes to sell the company for top dollar.
IT IS, UNFORTUNATELY, BESIDE THE POINT - ...But there is a much bigger issue that has barely been touched upon by Congress: the way tens of billions of dollars of taxpayers’ money has been funneled to A.I.G.’s counterparties ...
IT IS DESTABILIZING - ...How can you run a company when the rules keep changing, when you have to worry about being second-guessed by Congress? Who can do business under those circumstances?
Take, for instance, that new securitization program the government is trying to get off the ground, called the Term Asset-Backed Securities Loan Facility — or TALF. Although it is backed by large government loans, it requires people in the marketplace — Wall Street bankers! — to participate.
This program could help revive the consumer credit market. But at this point, most Wall Street bankers would rather be attacked by wild dogs than take part.
...
In previous columns, I have been an advocate of nationalizing big banks like Citigroup. But after watching Congress this week, I’m having second thoughts. If this is how Congress treats A.I.G., what would it do if it had a bank in its paws?
Not to be too contradictory with a writer who gets most of it right, but Nocera in the NY Times continues the theme of “bonuses” as if these payments were grants for superior performance in a company that obviously did not deliver even sub-par performance.
They may be labeled “bonuses” but they are not. They are retention payments. Last year after the people who created the problems at AIG had been fired, the staff at AIG’s Financial Product Division was asked to stay on to sell off the assets at as good a price as they could get. They knew the inventory and who their customers were and how to sell them and get the best price for them. These people could have left for other well paying jobs at companies with a future; AIG does not. Instead they were asked to stay at dead end jobs and if they did this for a year, they would get a lump sum payment; enough to see them through if they could not land a job for a while.
If they had been smart, they would have said “No thanks. The insane are running the asylum in Washington and this job is a political hot potato.” But I suspect that many of these people are Democrats (this is the Northeast after all) and people like Dodd, Schumer and Obama are on AIG’s payroll after all. What could possibly go wrong?
Well, it’s this: the people are getting more than a little tired of the political class throwing money around as if this was a Monopoly game. So the political class decided that they could use a little distraction, and they threw their AIG supporters under the bus. Then backed up and ran over them again. And never underestimate the stupidity of the people when they are in the hands of demagogues. This past week shows that we here in America really are the descendents of the immigrants from the Weimar Republic.
Skip the entire holocaust and go right for stringing them up with piano wire. I had no idea that the SS was alive and well in Connecticut.
Barney Frank wants AIG CEO's Choked with Piano Wire for getting Bonuses - Death Threats
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