First thoughts: Seizing the bully pulpit
Posted: Thursday, March 19, 2009 9:20 AM by Mark Murray
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First Thoughts
From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Reclaiming the bully pulpit: So what do you do when the American public is outraged beyond belief at the AIG bonuses? When congressional Republicans and now even some Democrats (see: Dodd, Christopher) are blaming your administration? You get out of Washington and use a power that these people don’t have: the bully pulpit. That’s what President Obama did yesterday at his town hall in Orange County, CA -- an event that was planned before the news about the AIG bonuses first surfaced. At the town hall, Obama accepted responsibility over the AIG mess (“Some say it’s the Democrats’ fault, the Republicans’ fault. Listen, I’ll take responsibility. I’m the president”). He presented himself as the anti-Washington figure (“It’s always good to get out of Washington for a little while”). And he struck a populist tone (describing a culture “where people made enormous sums for taking irresponsible risks that have now put the whole economy at risk"). Earlier in the day, Obama seemed to accidentally refer to “voters.” It appeared the president had slipped into candidate mode. But he clearly was “fired up and ready to go,” and perhaps showed that he misses the good old days of the campaign trail.
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Video: Obama speaks on AIG bonuses.***
California, Day Two: The president today will most likely pick up where he left off yesterday when he tours an electric vehicle plant in Pomona, CA, making remarks there at 1:45 pm ET; holds a town hall at 4:10 pm in Los Angeles, where he’ll be joined by California. Gov. (and stimulus supporter) Arnold Schwarzenegger (R); and then tapes his appearance on “The Tonight Show with Jay Leno” at 7:20 pm. Critics, of course, are wondering whether it’s appropriate for the president to be filling out NCAA tournament brackets and appearing on Leno, especially during these tough economic times. But after following the presidential election for the past two years, who didn’t think Obama would be having a little fun with the NCAA tournament?
*** Saving Private Geithner: Right before he departed to California yesterday, Obama also used the bully pulpit to perform his own rescue of sorts -- this one saving his Treasury secretary. “Tim Geithner didn’t draft these contracts with AIG,” Obama said.
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“There has never been a secretary of the Treasury, except maybe Alexander Hamilton right after the Revolutionary War, who’s had to deal with the multiplicity of issues that Secretary Geithner is having to deal with, all at the same time.” The president clearly bought Geithner some time from what was turning into a feeding frenzy for his head. What is Plan B, anyway? Whom does the congressional lynch mob that’s currently eyeing Geithner want instead, if Geithner is forced to step down? Geithner's toxic asset plan, which could come out as early as today or could be unveiled next week, involves some combination of government financing for hedge funds and other folks who have the cash to buy up these questionable assets. It could mean some Wall Street titans could make money, thanks to the government. It's not a popular plan, but given the need for the government to find a private sector solution, what choice does he have?
*** Saving yourself: While Obama yesterday was accepting responsibility for the AIG bonuses and trying to save his Treasury secretary, Chris Dodd was trying to save … himself.
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That’s what happened when he said that it was the Treasury Department that had requested the loophole for executive bonuses that were contained in contracts before Feb. 2009. "Sen. Dodd's original executive compensation amendment adopted by the Senate did not include an exemption for existing contracts that provided for these types of bonuses,” his office said last night. “Because of negotiations with the Treasury Department and the bill conferees, several modifications were made, including adding the exemption, to ensure that some bonus restrictions would be included in the final stimulus bill.” Treasury sources dispute Dodd’s account. Despite pointing the finger at the Obama administration, it seems as if Dodd's political problems -- he’s up for re-election in 2010 and seems vulnerable -- are going from bad to worse.
*** Czar wars: Mindful that this bonus issue may have fallen through the regulatory cracks at both Treasury and the Fed, the Obama administration is asking Congress to create a new regulatory agency. Just as the FDIC has the power to shut down banks without a bankruptcy court, this new agency could take the lead on complicated cases like AIG, allowing the agency head to act as a bailout czar. Bottom line: If Congress gives Obama this new agency, it means the fogginess of who is in charge of AIG (Treasury or the Fed) gets cleared up. And that person would be the one held accountable for the NEXT problem with AIG. Speaking of problems, these bonus stories out of Merrill Lynch are only adding fuel to the populist fire, and could make Obama and Geithner's job of getting more congressionally-approved bailout money that much harder. In fact, it could mean that Ben Bernanke’s Fed will have to step in and start handing out more cash. What Bernanke did yesterday seemed to single-handedly turn the market around for the day. By the way, is this the week that the Fed chairman began to show signs of having the credibility to be his own oracle of sorts -- a la Greenspan in the '90s and Volcker of the '80s?
*** Just askin’: While we love the outrage soundbites for television, do the congressional theatrics regarding the AIG bonuses really serve the institution well? Yesterday's AIG show was a substantive hearing at many points. But because there was grandstanding on both sides, it did seem to trivialize the confrontation and probably make lots of folks watching wondering if this group of people really is the best and brightest to be running the country. Individually, members of Congress usually do come across as very capable people. But put three or more members together in a hearing -- especially with a TV camera on -- and they seem to, well, morph into something else.
*** Nationalize this: We’re always leery of reading too much into a special election. But the contest at the end of this month to fill Kirsten Gillibrand’s congressional seat has become something to watch -- not only because it’s the first race of 2009, but also because it’s being fought on national issues. The big one is Obama’s stimulus, which Democratic candidate Scott Murphy supports and Republican Jim Tedisco opposes (although he didn’t take a position until recently). Also, Tedisco now argues that Murphy’s support for the stimulus means that he supports the AIG bonuses, since it included language protecting bonuses that had been agreed to before this past February; Tedisco even has a new TV ad hitting Murphy on the subject. And Tedisco is blasting Murphy’s ties to Wall Street and high finance (which certainly aren’t popular right now), and Murphy is countering with Tedisco’s longtime service in the State Assembly. One thing is pretty clear: While Tedisco once had a sizable lead in polls, the race has now narrowed. Given that -- and given the candidates are dueling over the stimulus -- does Obama decide to swoop into the race and stump for Murphy?
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