I have a dumb question. Can anyone help me out?

[spartan61]

I have been watching MSNBC and reading DU, but I have yet to see anyone blaming Bush and/or Paulson for the bail out money to AIG and other banks. Obama (and Geithner) seem to be getting most of the blame. I realize Congress, with the help of 3 Repugs, passed the TARP bill. Isn't there enough blame to go around? Why should Obama and Geithner be getting most of it? It seems to me that Paulson is the biggest perpetrator of this mess, including the bonuses.

[Laelth]

1. We had to have AIG's participation in the bailout.

Both parties knew it, and both parties have taken steps to insure it.

Executives said they would not participate if their bonuses were capped. They blackmailed us. The Federal Government can't let these banks (nor AIG which insured the credit default swaps) fail, because if it did, foreign banks would lose confidence in the U.S. and would not loan the government the $1.5 trillion it needs to keep the government running. Foreign banks finance the U.S. national debt, and AIG insures those banks against losses. AIG held a gun to our head and said, effectively, give us our bonuses or the whole Federal Government collapses because no bank will be willing to lend the U.S. money.

So, Treasury insisted that the bonuses be allowed, and the restriction against them (that Dodd had insisted upon) was removed.

That's what I think happened.

:dem:

-Laelth

cross-posted--twice now.

[spartan61]

4. Thank you for your explanation.

You helped to make this a little clearer for me.

[Laelth]

6. You're welcome.

The Obama administration is on very shaky ground with this mess, but the President is right to say he inherited the problem. It was Republican fiscal irresponsibility that made us susceptible to blackmail.

:dem:

-Laelth

[Diamonique]

2. I think it's because...

.. this most recent gift to AIG came on Obama's watch, and Geitner knew (or should have known) about these bonuses then.

The other time(s) we gave them money were on Bush's watch, but they didn't also coincide with these gigantic bonuses.

At least I think that's what's going on. The Obama admin isn't being blamed for all of the AIG bailout... just this recent part that came about at the same time as the bonuses.

Someone please correct me if I'm wrong.

[babylonsister]

3. They're not getting away scot-free...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8268445

[DeepBlueC]

5. As I understand it after hearing Liddy

No one at AIG got any performance bonus this year. The retention bonuses are an incentive for these guys to wind up business and stay until they have essentially worked themselves out of a job. If they know they are going to be out of a job at the end I can see why it would be in their best interests to take good offer that came along before that time which would leave the company in quite a mess. Much as I hate to admit it, Liddy is making a great deal more sense to me now.

All the politicians who find it easy to whisk off the business and personnel problems Liddy is having are strictly focused on their political problem. That is considerable. But AIG is like the keystone of an arch of lots of businesses and if it implodes the whole thing comes tumbling down.

It is hugely complex and the arousing of populist rage makes it harder. I am kind of chastened myself.

[DeepBlueC]

7. 'scuse, that's Libby above

didn't realize I'd done a dyslexic until it was too late to edit.

[DeepBlueC]

8. no it's not