When President Obama first began railing about bonuses on Wall Street, this time AIG, I immediately wondered: Is Iran no longer a nuclear threat?
The financial crisis is quickly showing the inexperience of Team Obama: Its members latch on to details and sideshows that stir big emotions — Big Bad Bonuses! Big Bad Rush Limbaugh! — but has yet to come up with a master plan that both Wall Street and Main Street can feel good about. Change is afoot without a roadmap.
The President slammed the values behind the AIG payday. But the AIG bonuses are not just a symbol of values gone awry — I can’t help but think that any normal person who contributed to a $40 billion loss would offer to return at least some of the bonus money! The bonus scheme and the dust-up are in many ways a crucible of the crisis we face: A concatenation of bad decision-making and leadership, from Wall Street to the White House, from Congress to Main Street.
The President, in his most recent rant and then re-cant on AIG bonuses, is not breaking this unfortunate chain. Mr. Cool nearly lost it, practically threatening to bring out the Marines to wrestle taxpayer money from a bunch of financial geeks (and insurance geeks, no less). Bringing the full power of the United States of America to bear on $450 million wasn’t the best idea in the Presidential tool kit — especially when grappling with a$1.7 trillion deficit. Now it turns out the Marines can’t subdue mercenaries wearing iron-clad contracts.
Obama should have left the entire matter to underlings; he diminishes his office and weakens his authority. The Washington Post asserts that the President has “dealt a sharp blow to his Administration” and will find it harder than ever to get Congress and the American people onboard with his ambitious agenda.
America elected a commander-in-chief, not a compensation-officer-in-chief. Saturday Night Live skewered the Administration focus on details brilliantly not long ago with a send-up of Treasury Secretary Timothy Geithner as a hapless telemarketer in search of a product.
Hey, brother, can you spare an idea?
This is a public relations nightmare. He is stirring up public anger, but to what end? Jimmy Carter fatally tried to show his empathy for the American hostages in Iran by refusing to leave the White House until they were freed. He looked weak and confused, shuffling around the Pennsylvania residence in his cardigan sweaters. Bill Clinton felt our pain, to the amusement of all. But strong leadership that stays above the fray is what Americans really want.
To that end, our new President has been trying out different personae, largely depending on his agenda. When he wanted to get his $787 billion stimulus bill passed, Obama presented a grim choice: deficits or doom. Once he had his bill in hand, his message changed — but the markets didn’t heed his new tune. The public and Wall Street are not as nimble as the President; sentiment can be like sediment — it sinks and settles. Not only were we still wading through his message of doom, but also through the disarray in Treasury.
And so, on the day Obama signed the stimulus bill on February 17, the Dow Jones Industrial Average sank 297 points to 7552.45. From there, the market lost 10.4% , falling to a 12-year low of 6,763 on March 2 — naturally, after AIG announced its stunning $61.7 billion fourth quarter loss. Obama’s sense of panic became palpable: The next day the President said at a news conference: “…profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it.”
The President became a value investor.
After the market began its four-day rally last week, Obama and his advisors went so far as to say that the economy’s fundamentals are strong (remember when he lambasted his opponent McCain for a similar assertion?). It’s true that it seems as if this President can work miracles. But really, in 50+ days can he take a financial mess of this proportion and go from doom to get-ready-for-a-boom? Indeed, even if they do think the worst is over, economists scoff at the growth projections in the new budget.
Obama has succeeded at making us mad, really mad. So let’s forget about those rosy projections in the budget and what that means for the deficit. It’s much more satisfying to get bent out of shape over something like AIG bonuses. And it’s ever so much more accessible than figuring out whether or not credit default swaps pose a mortal threat to our way of living.
The AIG story holds up a mirror to the American people, not just Wall Street. We’ve been living the life of Dorian Gray, a life of borrowed credit, of youth everlasting. At first the image made us smile; now we see the ugliness.
We want the old image back, or at least something better than what we have now. This is no time for the President to stir populist resentment or to micro-manage an insurance company. Now is a time for real leadership.
- Move Over Sarah Palin. It’s Geithner’s Turn on SNL (blogs.wsj.com)