President Obama's Enormous Political Capital At Risk Over AIG Bonus Imbroglio: Can a Presidency Become Insolvement?
Gulf Stream Effect: Oceanography Meets Politics When Cold Fish Get Into Hot Water
Anger Foments at AIG Bonus Imbroglio
Oceanography 101 always includes that curious chapter on the natural phenomenon known as the gulf stream. Just as the globe spins like clockwork, warmer southern ocean currents rise and colder water from the arctic sinks toward the bottom creating a formidable process that exerts an inordinate influence on the global geological canvas greatly impacting everything from weather patterns, to agricultural fertility not to mention all those little fishies and other wildlife's migration patterns:
Oceanography 101: Hot Water Over Cold Water = Gulf Stream
Meet the political version: a molten river of red-hot political anger flowing over our cold-blooded ocean of financial fear. President Obama's is now swirling about trapped in his own gulf stream of AIG hot water running through hs otherwise ice-cold veins. Bonusgate is causing the President to quickly burn through his Tier 1 political capital. Without an politically acceptable resolution President Obama's once-ample political capital could quickly evaporate making it necessary for his himliness himself to apply for TARP funding for his own political survival.
Inheriting Your Own Mess
But what's a boy to do? Don't ask Tim Geitner who engineered this doosey of a bail-out in the first place during the prior administration. Like Lady MacBeth there isn't enough ivory soap in the world to cleanse the stain of an ex post facto idiotic, unconditional lifeboat to the Mother of all Titanics. Regardless of the best of intentions and the possibility it saved the financial system and stopped the unthinkable from the "Big One", in hindsight this collossal decision was either (1) a Hopson's choice, (2) Morton's Fork (check out this hotlink!), or what seems to be emerging as the prevailing wisdom: the AIG bail-out looks like one big piece of s*** shoved down the throats of the U.S. Taxpayer.
Why? We have had absolutely no information or analysis until the recent revelations of who got the funds as CDS counterparties (Goldman Sachs, SocGen, Deutche Bank and bunch of foreign banks) and who -- get a load of this--who got the bonuses, particularly the $165 million in the AIG Financial Products Group who created this mess. Wouldn't it be nice to have 60 Minutes spend a couple of days tagging along with these traders and other "best and brightest" to see what it is they actually do? Boy oh boy someone should be hung by the balls...of their feet.
If this is a glimpse of the efficacy of the fiscal stimulus and the bank bail-out package with a 1,000 pages of legislation pork laden with 8,500 earmarks we are looking at a administration whose political liabilities could quickly exceed their political assets-- the real question is Timothy Geitner like a non-recourse loan and the administration can do a friendly deed-in-lieu of foreclosure. Perhaps we can trade out Geitner for Summers. We all know how smart Geitner is and, that like Obama, he's got the goods but, unfortunately, as his brief tenure shows he also got the bads. Keep a close eye on Kinko's resume department.
And so how do we get back the outrageous bonus payments? Stay tuned....