One of Barack Obama's many political talents is his ability to see a political firestorm from a mile away and adapt accordingly. (One possible exception to this rule: his handling of his former pastor.) So Obama announced today that he has ordered everyone's favorite Treasury Secretary, Timothy Geithner, to "pursue every single legal avenue to block these bonuses" that AIG plans to hand out to executives. This is a sudden reversal from previous administration policy. Yesterday, White House economics adviser Larry Summers lambasted the bonuses, but also said that the administration's options were limited because the money was a contractual obligation. So much for that explanation! Why did Obama shift so quickly? Here are two reasons. One, the administration may finally be learning that, while it can still blame the economy on Bush (for now), it does own the bailouts. And any populist furor over the bailouts won't just be directed backward at Bush. It will also be projected forward onto Obama and Geithner. Second, any day now the Obama administration will reveal the details of and begin to implement their bank rescue plan. That plan requires the government to provide leverage for private financial institutions. The private institutions will put up some money, sure. But, to get them to do that, the government will have to put up A LOT of money. Another trillion, perhaps. And that means public support is absolutely necessary. Public support that may slip away if the AIG problem isn't resolved soon.
Matthew Continetti
Obama Also Very Angry at AIG
One of Barack Obama's many political talents is his ability to see a political firestorm from a mile away and adapt accordingly. (One possible exception to this rule: his handling of his former pastor.) So Obama announced today that he has ordered everyone's favorite Treasury Secretary, Timothy…
Matthew Continetti · March 16, 2009
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