Obama Backs Geithner Despite Vast Criticisms

[biopowertoday]

Source: wpost


http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032102246.html?hpid=topnews


Obama Backs Geithner Despite Vast Criticisms
No Talk of Treasury Secretary Resigning, President Says in '60 Minutes' Interview

By Michael A. Fletcher
Washington Post Staff Writer
Sunday, March 22, 2009; A05

Embattled Treasury Secretary Timothy F. Geithner's job is safe and the subject of resignation has not come up in his conversations with President Obama despite calls from some in Congress for Geithner to step down, the president said in an interview to be broadcast tonight on CBS's "60 Minutes."

In excerpts released yesterday by CBS, Obama joked that even if Geithner offered to step down, he would say, "Sorry, buddy, you've still got the job." The hail of criticism that has hit Geithner for his handling of the bonuses paid by insurance giant AIG -- which only heightened the critique of his overall handling of the financial crisis -- is to be expected, the president said.



................In the interview, which took place at the White House on Friday, Obama acknowledged that he needs support of big Wall Street investors if his administration's plan to use federal money to leverage private investment to buy toxic assets is to succeed.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032102246.html?hpid=topnews

[No Elephants]

1. According to another thread on this board, the bonus contracts were

signed in March 2008. Either then or at some later point, Bush specifically approved them. But this is all the fault of Obama, Geithner and Dodd?

I can Republicans and the corporate media beating that drum, but I cannot see Democrats falling for it.

[rpannier]

3. Where the criticism of Geitner is justified is

1. This was well known in December and January. Why Geitner didn't know about it is weird, especially since they had declared it in filed documents.

2. He (Geitner) could have done something about it when he was negotiating with AIG execs in February

3. Dodd, by his own admission, was talked out of putting a limit on these bonuses.

The blame for this rests in way too many people to count:
Blame rests in congress for abdicating their responsibility for oversight, especially those more concerned with preventing 'Phantom Socialism" rather than fixing the economy.

[timtom]

4. In the past few days, my appreciation for

President Obama is rising rapidly.

But, Congress seems to suck very loudly. (Except for Kucinich, Kaptur, and...yes...even Ron Paul).

[marshall]

5. He's overworked and understaffed

That is what I have heard--he's so overwhelmed he doesn't know which way is up.

[rpannier]

12. Yet he was there last fall when the contracts were negotiated

This was common knowledge in Washington back in February because AIG had declared the bonuses in January

[stillcool]

6. I think that the problem is...

that it was known that bonuses were part of the agreement, but it was this latest round, and AIG in particular that is somehow different from all that went before. I don't know about Geithners negotiation with execs in February. What was that about? As far as Dodds provision, the question is the legality of changing the bonus bill passed by Congress. I think the blame lays with Congress. They voted for the bill.

[rpannier]

13. And I agree with you 100%. This should be laid at the feet on Congress

It is disturbing to me that Geitner has such a tin ear for this.

He knew about them (AIG did file the documents and he was working on Wall Street when this was negotiated) did not inform Obama.

I cannot fathom what he was thinking by not telling Obama.

In this economy, with the concern people have about everything in the economy and where the public has been opposed to the bail-out, to not tell the President is just too bizarre (IMO)

[No Elephants]

7. Let's say Geithner did know about the March 2008 bonus contracts in

February. What was he supposed to do about them?

And it was not within the authority of AIG execs to declare March 2008 contracts null and void in February 2009. Geithner would have had to negotiate with everyone who had a bonus contract.

Even if AIG were in bankruptcy, I don't think it could have rejected those contracts. You cannot declare a contract null and void when the other side has performed all of its obligations under the contract and the only part of the contract still unperformed is your obligation to pay money. (Those who stayed certainly had--don't know about those who left before receiving the bonus. That depends upon the wording of the contract and why and when they left.)

Dodd was talked out of it on the basis of lawsuits. Not only did valid bonus contracts exist that the employees had performed in full, but Bush had specifically approved those contracts. Rescinding them after that could have resulted in suits not only against AIG, of which the US is the 80% stockholder, but also suits against the US itself. Win, lose or draw, I don't think that is the kind of distraction the administration needs right now. It's worth $200 million just to have the adminstration focused on recovery and the rest of our problems, like economic recovery, 2 real wars and the war on terra, Israel/Gaza, Pakistan, nuclear proliferation, etc. etc. etc.

I realize people are pissed and the media is deliberately trying to whip everyone into a frenzy, so it's tempting to dance to that music, but, jeez. Priorities and focus are more important, IMO.

[rpannier]

10. The why did Geitner and others claim surprise???

Be honest about it up front.

Let people, especially the President, know what is going on.

As to your question about what was he supposed to do...
These were (according to AIG) retention bonuses. Retention bonuses by definition are given out to people who stay. At least 57 people took the money and left. They should have gotten nada.

As to it being a distraction the admin doesn't need...I respectfully disagree.
It is exactly what needs to be discussed.
Everything these companies do needs to be vetted constantly.
To take the approach of "What are you gonna do?" is exactly what got us into this mess in the first place.
The people at AIG and other large corporations are living an existence that says they can ignore the common person because they are better than everyone else.

It's NOT worth 200 million dollars to let it go because it leaves the questions as to what else is going on that we don't know about.
The 10 billion that disappeared from the CPA in Iraq was let go because it was considered a distraction when we were at war and was something that could be taken up at a later time.

[No Elephants]

15. Well, you've ignored every fact in my prior post, so I am not sure how to respond to

you, other than to point you back to my prior post.

[rpannier]

16. Actually I didn't ignore the 'facts' of your post

You said

1. Even if AIG were in bankruptcy, I don't think it could have rejected those contracts. You cannot declare a contract null and void when the other side has performed all of its obligations under the contract and the only part of the contract still unperformed is your obligation to pay money.

I responded:

These were (according to AIG) retention bonuses. Retention bonuses by definition are given out to people who stay. At least 57 people took the money and left.

They shouldn't have gotten the money because they failed to meet the obligation of retention

Although in fairness you did finish that post with:
Those who stayed certainly had--don't know about those who left before receiving the bonus. That depends upon the wording of the contract and why and when they left.

I don't disagree with you that those who stayed met the burden of 'retention'. And you have said you were unclear about those who left. (And I agree with you on that point as well)

2. Dodd was talked out of it on the basis of lawsuits. Not only did valid bonus contracts exist that the employees had performed in full, but Bush had specifically approved those contracts. Rescinding them after that could have resulted in suits not only against AIG, of which the US is the 80% stockholder, but also suits against the US itself. Win, lose or draw, I don't think that is the kind of distraction the administration needs right now. It's worth $200 million just to have the adminstration focused on recovery and the rest of our problems, like economic recovery, 2 real wars and the war on terra, Israel/Gaza, Pakistan, nuclear proliferation, etc. etc. etc.

I responded:

As to it being a distraction the admin doesn't need...I respectfully disagree.
It is exactly what needs to be discussed.

and

It's NOT worth 200 million dollars to let it go because it leaves the questions as to what else is going on that we don't know about.
The 10 billion that disappeared from the CPA in Iraq was let go because it was considered a distraction when we were at war and was something that could be taken up at a later time.

3. February. What was he supposed to do about them?

I responded:
Be honest about it up front.
Let people, especially the President, know what is going on. (Which according to both Obama and Geitner, he didn't. Because Obama was unaware)

We disagree on the significance of this issue.

I happen to find it significant because it is a part of the overall problem and it needs to be addressed. Because these 'little' things are cumulatively weighing down the economy.

[No Elephants]

18. Neither of us knows what the contracts said or when the employees who are gone actually left. The

contracts were signed at some point in March 2008. The bonus was paid in March 2009. It is probably safe to say that the retention period was one year. Perhaps the employees who are gone worked the year, or perhaps the contract provided for some proration. In any case, we don't disagree on those who left before the retention period expired.

You think lawsuits over bonuses that were paid pursuant to a legally binding contract approved by the POTUS are an okay distraction at this point in time? With the economy and the the environment, Iraq and Afghanistan, etc. were they are? I disagree, especially since a successful suit could get them double damages and attorneys' fees. Obviously, you and I just have different priorities.

You said, "It's NOT worth 200 million dollars to let it go because it leaves the questions as to what else is going on that we don't know about."

Those questions could remain whether we let the bonuses go or not.

"The 10 billion that disappeared from the CPA in Iraq was let go because it was considered a distraction when we were at war and was something that could be taken up at a later time."

First, I never considered that a mere distraction. However, there is a hell of a difference between then, when Bushco was not doing much of anything anyway, and now, when just about the whole world is about to go badly bankrupt and Obamadmin is trying to deal with one urgent sitution after another.

Also, a big difference between $10 billion and $200 million.

Also a big difference between a theft and getting money per a contract that the POTUS approved. Also a big difference between putting a perp in jail for theft of $10 billion and getting sued by scores of people who have a pretty good case and, if successful, might get more than double what they got per the contract.

If I find out found out in February that there were legally binding retention contracts, signed last year, that the POTUS had approved, I don't know that I would have recognized that as an "announcement worthy" event, either.

[Kolesar]

2. That article actually describes the Treasury Dept's plans to market the existing mortgages

It "kind of" wanders around the topic, though.

[w4rma]

8. I think it's a little ridiculous for the entire United States of America to be spending so much to

"save" a single solitary company. LET AIG FAIL.

[rollingrock]

9. Turning out to be as stubborn and inflexible as Bush

Meet the new boss, same as the old boss.

Geithner is the new Rumsfeld, an incompetent disaster. But Obama is incapable of ever admitting he made a mistake, so he will stick with him until hell freezes over.

[Roy]

11. Or maybe President Obama sticks with Timothy Geitner...

Because he has inside insight into the job he is doing rather than listening the spin from Joe Scar, CNN, and other sensationalist looking to block his agenda.

Where was all this scrutiny for the last 8 years. Let them focus on this 'gotcha' opportunity.

The majority of the people, I believe, are focusing on the big picture the president talks about

[Zhade]

14. You've got to be fucking kidding me. Doesn't Obama see how WRONG this is?

Doesn't he see the sheer rage about this?

[underpants]

17. Fluff bullshit and pablum

The DC establishment is trying anything to slow Obama down