Cyreenik Says
From The Washington Post:
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* Rage at AIG Swells As Bonuses Go Out
By Dana Milbank Tuesday, March 17, 2009
As the crowd began to file into the East Room yesterday to hear President Obama's thoughts on the AIG bonuses, the pianist in the Grand Foyer of the White House struck up the tune "Killing Me Softly."
It was an apt selection.
AIG, the insurance giant at the core of the financial meltdown, struck again over the weekend, disclosing that it would use some of its $170 billion in federal bailout money to reward its employees with $165 million in bonuses. And Obama was left looking like a pitiful giant as his aides explained that there was absolutely nothing they could do to stop the obscene payouts -- even though the government owns 80 percent of AIG.
As the president read from his teleprompter yesterday about "this outrage to the taxpayers who are keeping the company afloat," he developed a tickle in his throat and tried to clear it. "Excuse me," he joked. "I'm choked up with anger here."
But not enough. As Obama appeals for patience, his plans to stabilize the economy are at risk of being overtaken by a populist fury over the greed at AIG and in the rest of the financial industry.
The president and his aides, armed with little more than their jawbones, seem powerless to stop the outrage.
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I've been waiting for it, and now it's coming.
The news is filling with more signs that the American community's courage and patience are running out -- that more and more people feel that "sport thinking" isn't working anymore. (sport thinking is also known as, applying conventional solutions) This means we are fast coming upon Panic Thinking and Blunder time in the 2007-9 Economic Crisis.
This anger at AIG bonuses is a sign that panic thinking is gaining strength. The evidence for panic is the strengthening of thinking that, "Greed caused this crisis." This is a comfortable answer at the emotional level, but it is a total disconnect with reality. If greed was what caused these "nasty bankers" to crash the market, why didn't they not crash it and collect fat bonuses for many more years? That would have been the no-brainer tactic for the greed-motivated.
No... What caused this crash was surprise -- things didn't go as planned... by anyone... for over a year now!
You can blame the people at AIG for being surprised, but you can't blame them for being greedy. Greed in this matter is irrelevant... well, except to that lynch mob screaming outside AIG headquarters.
Ah well... Time to watch for the blunder. Blaming this crisis on greed is comfortable, but wrong, thinking. The Blunder will be a comfortable, but hugely expensive, solution to this crisis.
I predict the solution produced in response to this AIG "Greed Panic" will produce a hugely expensive and lasting scar on our American lifestyle.
Update: Some good news comes along. Here is a "cool head" at the Washington Post, the same Washington Post, writing about this.
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The Costs of Bailout Rage
By Ruth Marcus Wednesday, March 18, 2009
Could we put down the pitchforks for just a moment and have a reasonable discussion about the bonuses at American International Group?
No, I didn't think so.
Here goes anyway. I get the outrage. It's galling to pay $165 million to a bunch of wealthy traders to clean up a mess that they, or at least their company, made....
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So there is still some cool-headed thinking going on, and that's good.
Now we get to see what kind of "action" comes out of this issue.
The fact that congress is even seriously considering a punitive tax, and that President Obama is even considering signing it, is a Blunder. What follows is just going to make it a bigger one.
A Roger Saying dating back to the 1980's, when he witnessed Novell's first collapse, comes to mind: This refers to the VP who conducted the layoffs that took Novell from 120 people down to 20. Ouch!
"It was a thankless task, and, in the end, no one thanked him."
In 2008 the AIG people were working hard to save the ship. They didn't know how to do that any more than anyone else did. "Business as usual" wasn't going to work, so what was? I wasn't there, but I'm sure those people worked their tails off, made a lot of hard choices, and I'm sure it was a scary, scary time for them.
What is happening in this 2009 "AIG Bonus Rage" is the equivalent of an angry mob badmouthing firefighters for not saving a burning house. "Hey you bums! Why didn't you get off your fat asses sooner, and save this place!"
Badmouthing the firefighters at a burning house doesn't make a lot of sense, does it? Badmouthing the AIG people in 2009 is the equivalent.
If Congress continues to lead this lynch mob, and actually takes action, the scar they will leave is going to be huge. They are saying to business people at all levels, "If you get handed a 'hot potato', drop it! You will not become a hero for solving the problem, you will just get burned."
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From Wikipedea:
On March 1, 2009 CBS's "Face the Nation" asked Chief-of-Staff, Rahm Emanuel: Who represented the Republican Party? He answered, it was Limbaugh. [54][55][56]
On March 2, 2009, Limbaugh responded to Rahm Emanuel. [57]
In remarks aired by CNN on March 1, 2009, Republican Party Chairman Michael Steele said that Limbaugh, is "an entertainer".
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A recession is a time when the old dreams have stopped working, and the community is searching for new "boom dreams" that will work in their place. Usually, it refers to an economic condition, but I think the term applies here, too.
This curious interlude between Rush Limbaugh and the Republican Party at the beginning of March is a sign that the current recession is not just an economic one, it has struck the Republican Party as well -- the Republican Party is searching.
The oddities of this incident are:
o It was started by a Democrat talking, not a Republican
o It has gained a lot of media interest for many days
o The Republicans have not "laughed this off" successfully
I read this as meaning the Republicans are still very much "wandering in the wilderness" and trying to figure out what people and what ideas to follow next. This is... a political party recession.
This current state of affairs is interesting in part because of how fast the Republican situation has evolved in the last ten years. In 2004, the Republicans were solidly in "boom times" and Bush and Karl Rove were the symbols of that boom. Even after the 2006 mid-term elections signaled something was clearly wrong with Republican popularity, Rove talked confidently.
Now, in 2009, there's some searching to do for new right answers.
That's what I have for March in Cyreenik Says.
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