The media has a hard time reporting on what is really happening. This was true during the time leading up to the unprovoked Invasion of Iraq when, it seems, newspapers and the rest of the press were so dazzled by the specter of "a mushroom cloud" that they never bothered to see if there was a smoking gun, as the saying goes (and of course, there wasn't). Now the media are overwhelmed by the furious reaction of the American public to the AIG Bailout Bonus story.
The media have gotten it right that the American public reaction to this story is furious. It would be hard for anyone to get that wrong. Once again, however, it seems that the media either cannot be bothered to look for the actual facts or they are incapable of understanding and reporting the actual facts. Even reporters and columnists who have demonstrated the capacity to both understand and report the facts, no matter how hard, have given themselves over to the simplistic story that Americans are furious at the AIG Bonus Babies being paid Millions of Dollars and that Americans somehow 'just don't understand' that AIG already paid Billions of Dollars to other Bailout Takers like Goldman Sachs (who offer no apologies for double-dipping at the expense of the Federal Taxpayers who are financing the Bailout). One example is Mr. Joe Nocera of the New York Times, to whom this post is dedicated (to the tune of a major show-stopping song): "The Problem With Flogging A.I.G."
Neat story line. One thing wrong with it. It ain't so, Joe.
Many Americans are furious at the idea of failures receiving so-called bonuses. All the more so, when those Bonus Babies are the same ones, including at AIG, who helped cause the Financial Collapse. However that is not all there was to this story.
Do you remember how the story of the bonus contracts was peddled to Americans and who it was that tried to sell it to Americans, in the first place? On Saturday, March 14, 2009, newspaper reports leaked word that these Bailout Bonuses were due to be paid by March 15. The reports published their sources, which as I recall included the Treasury Department. Treasury Secretary Geithner was reportedly upset with these payments, but he had concluded on the strength of legal advice that there was no way to "abrogate" these contracts.
On Sunday, March 15, Mr. Larry Summers appeared on a Sunday talk show to announce that although he was "outraged" at these now-revealed contract obligations, there was nothing to be done about them but only to "follow the rule of law" and pay them.
That is about the time that American outrage hit. On Monday, March 16, President Obama reversed the course of his financial assistants, Messrs. Geithner and Summers, and expressed his own "outrage". The following week was filled with fury, it is true. But it was not alone a fury caused by nor directed at the Bonus Babies of AIG. No, it was more than that. Much more.
Mr. Geithner and Mr. Summers may or may not have sincerely concluded that the AIG bonus contracts could not be renegotiated, but they never seriously tried to renegotiate them. Of course, on Saturday, March 14 when the Treasury Department and others in the Federal Government leaked the bonus story, they all knew then that the bonuses had already been paid for the most part. The idea that nothing could be done on the 14th or 15th was as probably accurate as it was beside the point. In any case, Mr. Geithner was not even in the country at that time.
Americans are furious about the Bailout Bonus story because it became clear that key officials of the current Federal Government actually thought that this is how things are done. In their minds, clearly people who fail greatly deserve to continue to be paid greatly. Even if it is with other peoples' money. The American people are acutely aware of unfairness, even when key officials in the American Government are not. And even when those same key officials are too dazzled by themselves to realize just how much the American people are capable of realizing.
That story offers a lot more than fury directed at some people receiving misdirected bonuses. But perhaps it is not as easy to write.
Please Read The Disclaimer. This is a simultaneous post with www.insuranceclaimsissues.typepad.com, the first of its kind.
Yes, very difficult to the media in obtaining what really the truth is.
Seth
Posted by: lucas law center | March 30, 2009 at 02:59 AM