First thoughts: Rage against the machine
Posted: Monday, March 16, 2009 9:13 AM by Domenico Montanaro
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First Thoughts
From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Rage against the machine: Anger at Wall Street and at America’s financial institutions has been simmering for a while now -- the numerous bailouts, Bernie Madoff, and Jon Stewart vs. CNBC have been just a few examples. But with the news over the weekend that AIG, 80% of which is now owned by the federal government, is awarding millions in bonuses to executives has most likely turned that anger into a furious boil. As the New York Times’ Nagourney writes, this populist backlash presents a huge challenge for an Obama administration that might have to hand out additional bailouts to further stabilize the banking industry. (“The biggest risk is that we don't have the political will,” Fed chairman Ben Bernanke warned last night on “60 Minutes.” “We don't have the commitment to solve this problem, and that we let it just continue.”) But the populist rage also might present a bigger challenge to the political party that’s more associated with big business, less regulation, and tax cuts for the wealthy. In fact, if there was a time for the Obama administration and Democrats to push to let the Bush tax cuts to expire, to press for the Employee Free Choice Act (or “card check”), or to institute new regulations, this is the time, right? Still, now’s a time when everyone in Washington is suddenly going to be channeling his/her inner-populist. Who will have the most credibility doing it? As for the short term, Congress is going to want a pound of flesh (and then some) from AIG. Obama also will discuss AIG during his remarks today (see immediately below).
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Video: Leaders at the White House and on Capitol Hill are expressing outrage at AIG, which plans to use $165 million for employee bonuses and retention pay.
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Learning their lesson? What a difference a week makes. Last Monday, President Obama held just one event on stem cells and nothing on the economy. Now fast-forward a week, and it’s all about the economy on this Monday (and also about propping up Geithner again). At 11:25 am ET, President Obama and Geithner meet with small business owners and community lenders, and then Geithner delivers remarks to these folks at noon. No one can say these guys don’t listen to criticism, particularly regarding the optics on the economy. Per
Bloomberg, Obama and Geithner will announce $375 million (from the economic stimulus) “to help small businesses to expand federal guarantees and lower lending fees to try to revive the flow of credit… Obama also will announce his intention to spend more than $10 billion in an effort to unlock the secondary credit market and increase bank liquidity.” Also today, at 2:00 pm, Obama speaks to employees at the Department of Veterans Affairs. Speaking of optics, the president has a late-night date with Jay Leno on Thursday when he travels to California. Just asking: when was the last time a sitting president did the "Tonight Show"?
*** A fundamentally rough interview: While the AIG news dominated the latter parts of the Sunday conversation, don't miss the fact that Christina Romer, chair of Obama’s Council of Economic Advisers, helped put the administration in a bit of a spinning bind today. On "Meet the Press," when asked if the fundamentals of the U.S. economy are strong (in reference to Obama’s McCain-like remark last week about the “fundamentally sound aspects of our economy”), Romer gave a McCain-like answer, circa Sept. '08: “Well, of course the fundamentals are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology.“ And, while we're not sure if the administration wanted this out there or not, Romer also admitted that we are in a war -- an analogy the administration appeared to be sidestepping last week.
Video: Christina Romer discusses the economy on "Meet the Press."
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Budget politics: Over the weekend, GOP congressional leaders said they wouldn’t release a competitive budget proposal. This was a pitfall for the Republicans and a smart straw-man argument for the Dems. Indeed, the Democratic-leaning group Americans United for Change has a
new TV ad hitting Republicans on this very point. (“So what kind of budget have the Republicans proposed to get us out of the mess THEY created? … That’s right, nothing.”) Here's the thing: Obama has been very clever to take a little something from the GOP when it comes up with an alternative (like Recovery.gov). So instead of Republicans offering up a full alternative -- only to have Obama take one thing from them and win the PR battle on the bipartisan front -- they now don’t want to offer anything and force the debate ONLY on the Obama-Dem side of things. It's a tricky proposition, because the party could like it has no real alternative ideas. Still, the Republicans will be happy with their choice if the debate ends up being about Democrats debating Democrats. After all, this full-court press to pass the budget is a tad odd since Obama just needs 50 votes in the Senate, not 60, meaning the real target for this upcoming DNC campaign are conservative Democrats.
*** Simmons vs. Dodd: Ex-Rep. Rob Simmons (R), who lost his congressional seat in the Democratic takeover of 2006, yesterday announced that he’s challenging Connecticut Sen. Chris Dodd (D). It’s still very early -- 596 days until Election Day -- but this Senate race might very well be the GOP’s best pick-up opportunity of 2010, outside of those appointments in Colorado, Illinois, and New York.
*** Spinning more than a basketball: By the way, one of the most underrated spinners in American society: the college basketball coach. Last night, during the NCAA tourney selection, one of us listened to the spin coming from the 13-loss Michigan coach, who talked about the toughness of the Big Ten (really?) And then there was Memphis’ John Calipari making the claim that Conference USA is tough as well (double really?). Move over Congress and Robert Gibbs; the best spinners on earth might be college basketball coaches. Then again, the BCS system affords college football coaches to spin like crazy, too.
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