Greenwald’s Half-Truth On AIG Bonuses
Treasury didn't simply "demand" Dodd loosen any restrictions so these bonuses could be paid. He informed Dodd his legislation was flawed and would only lead to more trouble, including expensive law suits.
In developing news Geithner has released a letter sent to Pelosi just today. But the politics are going to play out, here's a new wire story on all this. The Rangel quote on any move to recoup the bonuses is at least fun. Of course he doesn't see it as a weapon, it's a cash cow to him.
Not all Democratic leaders were racing in that direction. Penalizing people with the tax code could be inappropriate, declared Rep. Charlie Rangel, D-N.Y., chairman of the taxwriting Ways and Means Committee. He said, "It's difficult for me to think of the code as a political weapon."
The bottom line for now is that the politics are only going to work against the plan, assuming you support it. Geithner wants to recoup the bonuses by taking it from future monies to be paid. Fine. But that doesn't take it from the employees. It only takes cash away from the very thing they feel requires propping up – AIG.
What this entire fiasco documents is how bad an idea it is when the government gets its hands around elements of the private sector. They invariably screw it up.