Editore"s Note
Tilting at Windmills

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

March 19, 2009

THURSDAY'S MINI-REPORT.... Today's edition of quick hits:

* Not too big a surprise: "The Treasury Department, trying to stabilize the battered auto industry, will provide up to $5 billion in financing to troubled auto parts suppliers who are linked to Detroit's carmakers, officials said Thursday. The funding would be made available from the government's Troubled Assets Relief Program, or TARP, said two congressional aides briefed on the plan."

* Claiming full responsibility for the situation, Treasury Secretary Timothy Geithner told CNN today that his office "asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses." He said he requested the measure to prevent costly governmental litigation.

* Two far-right senators -- Jim Bunning (Ky.) and Johnny Isakson (Ga.) -- called for Geithner's ouster today. No one really cares what they think.

* Today is the sixth anniversary of the start of the war in Iraq. It didn't generate too much attention.

* On a related note, President Obama's Iraq policy is drawing considerable support from the public.

* Lawrence Wilkerson is still on a roll: "A former Bush administration official says many Guantanamo detainees are innocent and have been held only because U.S. officials hoped they would know something important."

* Why did yesterday's House hearing with AIG CEO Edward Liddy go poorly? Daniel Gross has a compelling piece arguing that lawmakers were asking questions of the wrong person.

* Noam Schieber warns of potential unintended consequences of today's vote on AIG bonuses.

* Good: "The House voted Wednesday to approve the largest expansion of government-sponsored service programs since President John F. Kennedy first called for the creation of a national community service corps in 1963."

* The Senate passed the public lands bill, again.

* I'd be pretty surprised if immigration reform happened this year.

* How far gone is Larry Kudlow? Today he literally set money on fire. There's something deeply wrong with CNBC.

* McCain and Lieberman talk U.S. policy on Afghanistan. Joe Klein has some worthwhile thoughts on the subject.

* Last week, on "The Daily Show," Jim Cramer was contrite and committed to doing better. Today, not so much.

* Who made the final four in your Bracket of Evil?

* And my Quote of the Day goes to Robert Farley, who made me laugh out loud: "Now that I'm more or less finished with my taxes, I can proclaim without reservation that I have, for the 34th consecutive year, successfully managed to keep my income below $250000. Take that, Barack Hussein Hitler Lenin Osama! I can only hope that society will realize the folly of constraining my creative energies through the medium of a modest increase in the marginal tax rate."

Anything to add? Consider this an open thread.

Steve Benen 5:30 PM Permalink | Trackbacks | Comments (44)

Bookmark and Share
 
Comments

Today he literally set money on fire.

Correct me if I'm wrong, but I thought the destruction of currency valued at more than $0.01 was a federal crime?

Posted by: doubtful on March 19, 2009 at 5:32 PM | PERMALINK

Litigation issues, right. Someone is tone deaf, seriously tone deaf.

Posted by: jen f on March 19, 2009 at 5:32 PM | PERMALINK

Sorry, but I gotta agree with the right-wing loonies (and atrios) -- Geithner is more concerned with protecting his banking buddies than doing what would help the country.

Posted by: Obama -- Not as Tough as the Steelers on March 19, 2009 at 5:35 PM | PERMALINK

avoid costly litigation? wha?

at any given moment the US Government has literally thousands of attorneys on the payroll. they make the same amount whether they are litigating, drafting regulations, advising officeholders, investigating crooks, or following their college basketball pool. the only "cost" to government litigation is the opportunity loss of the other things the government attorneys could be doing, but there is no monetary cost. and in this case, i challenge Geithner to explain to the public what they could possibly be doing that is better than making an example out of bigwigs at AIG.

Posted by: zeitgeist on March 19, 2009 at 5:37 PM | PERMALINK

zeitgeist,

Not to mention no one wanted to 'avoid costly litigation' when it came to asking/forcing Union workers to renegotiate their contracts with concessions.

Damn Geithner for making me agree with Bunning and Isakson, and damn him for bringing Dodd down with him.

He's gotta go.

Paul Krugman for Treasury.

Posted by: doubtful on March 19, 2009 at 5:42 PM | PERMALINK

I'm sure there's probably a word for the kind of coward Jim Cramer is, but I can't think of it now. Let me see if I have this straight: He gets called out for his ridiculous posturing and dissemination of misinformation and immediately folds when confronted, then a week later, safely away from any danger of being confronted again, he tells tales of how the guy who called him out was wrong.

Why don't you go back on TDS and say it to Stewart's face, Cramer? Or are you afraid of being made to look like a fool again? Honestly, you can't look more foolish than you do now.

Posted by: Singularity on March 19, 2009 at 5:43 PM | PERMALINK

"Two far-right senators -- Jim Bunning (Ky.) and Johnny Isakson (Ga.) -- called for Geithner's ouster today. No one really cares what they think."

Actually, it wouldn't be politically prudent, but personally, I'd like to see it happen. I'm not comfortable with Geithner. This episode to reinforces my concerns.

Posted by: CJ on March 19, 2009 at 5:43 PM | PERMALINK

He said he requested the measure to prevent costly governmental litigation.

As others have said, this doesn't wash for a host of reasons. Geithner is Obama's biggest mistake, and should be sent packing.

Posted by: qwerty on March 19, 2009 at 5:50 PM | PERMALINK

I'm sure there's probably a word for the kind of coward Jim Cramer is... -Singularity

I won't go as far as a Tom DeLay patented long distance diagnosis, I will say that a lot of people in his field are clinically psychopaths.

Posted by: doubtful on March 19, 2009 at 5:56 PM | PERMALINK

You guys are a$$es. Geithner is so totally right: those AIG execs would spend millions in non-recoverable litigation expenitures with likely no indemniifcation from the company or its largest shareholder.

sheesh. commie bastards the lot of you

Posted by: eric on March 19, 2009 at 5:57 PM | PERMALINK

Geithner needs to be fired or resign. And anyone he brought into the government with him. NOW! Before this turns into a major Rethug talking point.

And they can take the NPR administrators with them. It's been like radio Parade Magazine for the past two years.

Posted by: slanted tom on March 19, 2009 at 6:02 PM | PERMALINK

sheesh. commie bastards the lot of you

What is it about the Republicans' total shellacking in the last election that has catapulted the entire GOP back to the 1950s? It's like all these freaks climbed into a time machine and can't find the door out.

Posted by: shortstop on March 19, 2009 at 6:03 PM | PERMALINK

Quote of the Day: "...I can proclaim without reservation that I have, for the 34th consecutive year, successfully managed to keep my income below $250000. Take that, Barack Hussein Hitler Lenin Osama! I can only hope that society will realize the folly of constraining my creative energies through the medium of a modest increase in the marginal tax rate."

Assuming this guy isn't lying his ass off about "constraining his creative energies" (a generous assumption), he'd essentially be giving up additional income to avoid an increase of his effective tax rate (i.e. total taxes/total income) amounting to less than 1 percent. In other words, he'd be turning down a dollar to save a penny. What an idiot.

Posted by: CJ on March 19, 2009 at 6:03 PM | PERMALINK

The name that escaped the poster above for Cramer was : spineless pussy.
He is an absolute embarassment to his whole family/network/profession.
Jon ought to get a follow up round with him.

Posted by: vwmeggs on March 19, 2009 at 6:06 PM | PERMALINK

What an idiot.

Yes, he would be, if he weren't being broadly sarcastic.

Posted by: shortstop on March 19, 2009 at 6:07 PM | PERMALINK

"And they can take the NPR administrators with them. It's been like radio Parade Magazine for the past two years."

Hell, yes.

Posted by: Nothing But the Ruth on March 19, 2009 at 6:07 PM | PERMALINK

At this point, Cramer is irrellevant. People should be complaining to NBC for using the Today Show for the purpose of defending poor journalism with out and out lies. I e-mailed Steve Capus as soon as I watched it.

steve.capus@nbc.com

Posted by: Danp on March 19, 2009 at 6:12 PM | PERMALINK

CJ, @18:03,

It was a joke, a parody. The first clue was in the usage of the word "modest" in reference to the tax increase; a true right-winger would consider even a penny to be outrageous. But also... If you actually go to the site and look at the recommendations (vis blogs), they're all familiar lefty ones.

Posted by: exlibra on March 19, 2009 at 6:19 PM | PERMALINK

Heard this on my local radio AM 1070 this morning. Very heart wrenching...

http://www.knx1070.com/Pomona-Teens-have-Heart-Breaking-Message-for-Obama/4049060

pass it around

Posted by: JWK on March 19, 2009 at 6:19 PM | PERMALINK
Noam Schieber warns of potential unintended consequences of today's vote on AIG bonuses.

Amazingly flimsy. His main jab is this:

As for the consequences we can't foresee, most of them relate to the precedent of taxing income retroactively, which seems to introduce a level of arbitrariness that can't be good for economic growth.

Which, first of all, misses the point that retrospective tax changes (increases and decreases), either general or targetted, aren't some new precedent set by this bill -- Heck, in one of the last brouhahas over a retroactive tax increase, in 1993, the Treasury Department presented over a dozen previous occurrences to rebut the claim that retroactive increases were "unprecedented" -- and, second of all, offers neither evidence nor reasoning to support the suggestion that this would be bad for economic growth. A warning would point to specific consequences that the drafters hadn't intended, and provide evidence and/or argument that provides a reason to believe those consequences would materialize. This is just shear fluff.

Then he offers this:

There are third-world juntas that would think twice before doing this.

Well, yeah, most third-world juntas would think twice before reigning in blatant abuses by the already-powerful, and then choose not to do it anyway. But then, that's one of the many things most of us dislike about third-world juntas.

Posted by: cmdicely on March 19, 2009 at 7:31 PM | PERMALINK

* Two far-right senators -- Jim Bunning (Ky.) and Johnny Isakson (Ga.) -- called for Geithner's ouster today. No one really cares what they think. Well, maybe no one cares what "they" think, but what they think has considerable cross-over appeal beyond rightist wingnuttery. Many progressive types (please support them Steve, instead of being a Richard Cohen lite semi-establishmentarian, OK?) do not like what Geithner and Summers etc. have been up to. For example, David Sirota on our side called for Geithner to resign or be fired:

http://www.dailykos.com/storyonly/2009/3/18/710167/-Lying-Or-IncompetentEither-Way,-Geithner-Needs-to-Be-Fired

by davidsirota [Subscribe]
Wed Mar 18, 2009 at 11:37:18 AM PDT

I've never been a fan of Treasury Secretary Tim Geithner - he's a Rubinite who has been too close to Wall Street, and too focused on using government power to protect private shareholders. This is the guy who told the Senate that his primary goal in bailing out the financial industry with public money was not to protect the economy or taxpayers, but instead to use our taxpayer dollars to preserve "a financial system that is run by private shareholders [and] managed by private institutions." Despite my strong disagreements with his ideology, only today have I gotten to the point where I think it's clear he needs to be fired. Why? Because today he proved he's either lying to the public or totally incompetent.

I've heard some reasons why Geithner had to pull punches on the bailout, such as legal issues - maybe that works. But there was too much leeway and secrecy permitted (and much of that is Congress' fault, we have heard too e.g. on NBC News tonight.) Yet complaints like David's need to be taken seriously. No time for Democratic-side establishmentarianism and door-mattery.

PS: Obama on Leno tonight, cool and I hope he lays some barbs out there!

Posted by: Neil B. ♣ on March 19, 2009 at 7:33 PM | PERMALINK

I am really confused about the whole thing and so tired of hearing about AIG, but in view of the fact that the repubs have been fully supportive of the bonus payments, why are they upset at Geitner? Also I have read that Bush approved these payments before he left office and left them for a time bomb for Obama.

Posted by: JS on March 19, 2009 at 7:34 PM | PERMALINK

Robert Farley is a piker; I've kept my income

Posted by: Ken on March 19, 2009 at 7:46 PM | PERMALINK

Um, guys....

It's not the money that's the problem for the AIG bonuses. It's the time and resources. You start litigating the bonuses, and you really think AIG business won't grind to a halt?

Posted by: gwangung on March 19, 2009 at 7:51 PM | PERMALINK

another proposed new fusion device:

http://nextbigfuture.com/2009/03/general-fusion-research-update.html

Before being Secretary of the Treasury, Geithner worked for the IMF and was president of the New York Federal Reserve Bank. Doesn't he have a track record of not making a big difference, of not being a positive force for good?

The AIG bonuses are not a large fraction of the bailout money. The real crime was the bailout -- it's too bad Congress today did not rescind the bailout.

Posted by: MatthewRMarler on March 19, 2009 at 8:01 PM | PERMALINK

Also I have read that Bush approved these payments

I wouldn't bet that Bush knows his middle name, but certainly Paulson, Bernanke and probably Geither, who was the NY member of the Fed, knew about these and many other bonus contracts. NY Att Gen Andrew Cuomo thought he had stopped these particular AIG bonuses, so they were certainly not a secret.

Certainly the members of Congress knew about them at some point or there would not have been attempts to add clawbacks in the Stimulus bill last month. The clause that limited them, which was added in conference, was published on line well before the final vote, so all these congressmen who are running around crying, "who me?" knew this was coming, too.

So the question should be why the outrage waited until the "contracts" were fulfilled.

Posted by: Danp on March 19, 2009 at 8:03 PM | PERMALINK

Who made the final four in your Bracket of Evil?

Rove,Fox (PAC) News,Exxon,Palin

Two far-right senators -- Jim Bunning (Ky.) and Johnny Isakson (Ga.) -- called for Geithner's ouster today. No one really cares what they think.

Geithner must go. A speedy recovery depends on a competent, confident, and credible Treasury Secretary. She/he must be willing to do whatever it takes, including wiping out shareholders, to fix the financial system. Geithner's much too timid and much too deferent to the "federally subsidized" powers that be on Wall Street. I'm hoping Obama has set a decision date in the near future, taking into account that Geithner has been working on this problem for at least 6 months, to say, 'Ok, Tim, time's up.' Fill the position with Volker or Sheila Bair.

Posted by: John Henry on March 19, 2009 at 8:13 PM | PERMALINK

re immigration reform... this is one progressive not for another amnesty.

Folks who are here illegally should go back. I don't care how many of them there are.

Enforce the rule of law. There's "moral hazard" with yet another amnesty, in addition to the fact that states cannot afford providing all the social services they use.

Posted by: clem on March 19, 2009 at 8:18 PM | PERMALINK

eric, you fascist bastard, did Flush Lemmingbowel splash some on you? Would Volcker be a good choice to replace Geithner, who has become less popular than peanut butter while protecting his bankstard buddies? Or Krugman as doubtful suggested?

Posted by: tko on March 19, 2009 at 8:35 PM | PERMALINK

True to form, Gov. Pitbull (R-AK) has announced that she will refuse 45% of Alaska's share of stimulus funds. She's concerned about the growth of state government. But, get which parts she's concerned about.

"The biggest single chunk of stimulus money that Palin is turning down is $160 million for education. There’s also $17 million in Department of Labor funds (vocational rehabilitation services, unemployment services, etc.), about $9 million for Health and Social Services and about $7 million for Public Safety."

We certainly don't need to be concerned about education, the social safety net or public safety when the state budget has taken a big hit because of the drop in oil prices. Palin is posturing for a national audience at the expense of Alaskans.

Sen. Begich has already requested that the Legislature accept all the funds on behalf of Alaska. "I trust the legislature will do the right thing and take Alaska’s share of the money for education in the economic recovery package,” the statement quotes Begich as saying. “We owe it to our children to give them the most opportunities possible, and this is money fairly allocated to Alaska in this stimulus package.”

Posted by: AK Liberal on March 19, 2009 at 8:47 PM | PERMALINK

"It's not the money that's the problem for the AIG bonuses. It's the time and resources. You start litigating the bonuses, and you really think AIG business won't grind to a halt?"

Maybe the economy will be better off if the top executives focus on something other than AIG business. In fact, fire them all. Or as Keith O just said, "Enough."

Posted by: jen f on March 19, 2009 at 9:26 PM | PERMALINK

The AIG bonuses are not a large fraction of the bailout money. The real crime was the bailout -- it's too bad Congress today did not rescind the bailout.

Uh-huh. Another primer on why you're wrong again, this one from MSNBC just today:

So why not pull the plug [on AIG]? Because AIG has 74 million customers and operates in 130 countries, and letting it implode would positively unhinge financial markets around the world.

AIG built a murky, unregulated business issuing insurance for mortgage-backed securities and other debt held by banks. When the housing bubble popped and those securities went bad, AIG was left on the hook for billions of dollars in claims it couldn't pay.

Letting AIG die would make all of that insurance worthless. Banks around the world would be forced to take massive losses. Some could collapse, unnerving markets, driving up unemployment and maybe turning the recession into a depression.

The U.S. got a taste of that scenario in September, when bad debt forced investment bank Lehman Brothers into the biggest bankruptcy in U.S. history. Thousands of other firms were exposed to Lehman's complex financial contracts, and the resulting fear and uncertainty sent stocks plunging.

And that was just a small taste.

The AIG bonuses are not a large fraction of the bailout money. The real crime was the bailout -- it's too bad Congress today did not rescind the bailout.

You had absolutely no criticism of Bush's bailout of AIG until Obama became president. Curious that.

The AIG bonuses are not a large fraction of the bailout money. The real crime was the bailout -- it's too bad Congress today did not rescind the bailout.

The real crime is that the ward nurse allows you unfettered access to a computer.

Posted by: trex on March 19, 2009 at 9:39 PM | PERMALINK

from Klein: The Obama Administration does look at Afghanistan in a rather more sophisticated way than McCain and Lieberman, as part of a regional problem where the topline effort has to be made to recivilize Pakistan--which is where our most difficult terrorist enemies are now residing. The Af/Pak plan to be announced next week will include a comprehensive menu of initiatives to aid and encourage Pakistan to take decisive action to clear out the safe havens in Waziristan and Baluchistan where Al Qaeda, the Pakistani Taliban and the Afghan Taliban (and yes, there's a difference between the two) hang out. There will be a continuing, and perhaps enhanced, US special ops and drone campaign against those havens. This area is the crux of the Af/Pak problem. McCain and Lieberman--like last week's neocon op-ed in the New York Times from Max Boot and the Kagan Family Singers--barely mention it. This, to me, is inexplicable and perverse, a purposeful myopia that seeks to transform Afghanistan into the last war, Iraq.

Thank goodness, none of the "minimalism" that McCain and Lieberman worried about, not even in the face of declining public opinion support for a war in Afghanistan.

trex: So why not pull the plug [on AIG]? Because AIG has 74 million customers and operates in 130 countries, and letting it implode would positively unhinge financial markets around the world.

Another commentator who chooses not to distinguish between "bankruptcy" and "imploding". When Enron went bankrupt its manufacturing arm continued to manufacture and sell its products; a long list of companies have actually worked their way out of bankruptcy; most companies get split into parts and the parts are bought up, and old management is punished.

"Unhinge" financial markets? Is "unhinge" a technical term, or just another term for "panic"? Every generation thinks that its first financial panic is the end of "capitalism as we know it", or some such. Capitalism continues to expand, only the old capitalists get left behind.

Posted by: MatthewRMarler on March 19, 2009 at 10:21 PM | PERMALINK

from TPM: The question: "Barack Obama has announced that he will remove most U.S. troops from Iraq by August of next year but keep 35,000 to 50,000 troops in that country longer than that. Do you favor or oppose this plan?"

Omitted was Obama's qualification that American troops not be needed in the interim.

The remaining 35,000 to 50,000 troops will be trained and ready for "combat", but will not be called "combat troops".

Posted by: MatthewRMarler on March 19, 2009 at 10:26 PM | PERMALINK

Another commentator who chooses not to distinguish between "bankruptcy" and "imploding".

Enron wasn't involved in long chains of utterly massive credit default swaps, wasn't insuring other major insurers who were responsible for keeping critical companies afloat, and wasn't in a position to destroy the bond market -- so there's no intelligent comparison there.

Let's just reiterate that point: Enron was so unlike the unique animal that is AIG there is no intelligent comparison.

And "unhinge" is a perfectly acceptable term to describe the effect of an AIG bankruptcy on the world financial markets, although "armageddon" might be more apt.

Sadly, you aren't even able to level a substantial criticism, and your efforts to poo-poo and tut-tut it all away in lieu of informed commentary are transparent.

If you don't enjoy a basic understanding of an issue, it's best not to comment on it, Matt. You had your Dan Rather moment a few weeks back with your energy "report" on the output of a desalination plant that isn't even in existence and won't be for years. It's long past time for you to retire.

Posted by: trex on March 19, 2009 at 10:40 PM | PERMALINK

what about getting the donations to Senator Dodd and the rest of the hypocrites ?

Posted by: dennis on March 19, 2009 at 10:47 PM | PERMALINK

In other energy-related news, ExxonMobil is increasing its investment in China.

http://www.energy-daily.com/reports/ExxonMobil_to_build_technology_centre_in_Shanghai_999.html

The quoted dollar amount is not large, but more will probably follow.

Enron was so unlike the unique animal that is AIG there is no intelligent comparison.

Sure. 70+ million customers, international, too big to fail, and all that. And yet, if it declared bankruptcy most of its divisions would work fine.

Posted by: MatthewRMarler on March 20, 2009 at 12:59 AM | PERMALINK

And yet, if it declared bankruptcy most of its divisions would work fine.

Really? They haven't "worked fine" for years and still aren't working fine. They're unable to remain solvent much less profitable even with the injection of hundreds of billions of dollars, and a global financial meltdown wouldn would make them even less viable, if there is such a thing as less than dead.

Exactly which division would "work fine" amidst the backdrop of a global depression? Please be specific and show your work. If your answer is the insurance division, you may want to recheck your answer before handing in your test.

Posted by: trex on March 20, 2009 at 1:20 AM | PERMALINK

(said in an Emily Litella voice:)

"What's all this fuss about a Vinyl Floor? I thought the basketball court was on wood..."

Posted by: MR Bill on March 20, 2009 at 6:21 AM | PERMALINK

Jim Cramer= Weasel?

He reminds me of the kid who gets caught at school, breaks down in tears in front of the teacher, cries that "it a'int" my fault, and then in the schoolyard brags about how he fooled the teacher.

Nickey on Big Love comes close.

Posted by: marc on March 20, 2009 at 7:36 AM | PERMALINK

An early return from spring training, shortstop? Yeah, those RepuGs really believe Moose Skowron and the Mick will bring the Yankees back.

Yes, Marler, and Enron owned PGE in Portland will still beg for rate increases, if Enron folds. Our rates with PGE have increased over 42 per cent in the past eight years, while the City of Seattle owned City Light has dropped their rates by 8%. Plus, when the 57 year old CEO of PGE, Peggy Fowler retires this year, she will take over 4.4 Million, plus $790,000 per year for life. Yeah, they do need those requested rate increases. That 790 is not a typo. Now, excuse me as I pay our PGE bill online. Must help, must'nt I.

Posted by: berttheclock on March 20, 2009 at 9:20 AM | PERMALINK

Mr Bill,

Speaking of the '50s, I thought they played on "ParKay"

Posted by: berttheclock on March 20, 2009 at 9:33 AM | PERMALINK

Paul Krugman for Treasury.
.
DEFINITELY works for me, doubtful.

Posted by: AfGuy on March 20, 2009 at 10:13 AM | PERMALINK

Litigation was going to cost MORE than $165 million"????

Who are these overpaid lawyers that have such a hard time proving a bankrupt company can't pay anyone a single dime much less millions?

Some is seriously padding their bills and maybe it's time Timmy fell down a well somewhere.

Posted by: toowearyforoutrage on March 21, 2009 at 8:11 AM | PERMALINK




 

 

Read Jonathan Rowe remembrance and articles
Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon Sign up for Free News & Updates

Advertise in WM



buy from Amazon and
support the Monthly