The Common Good

Bonuses for Ruining the Economy

Source: Slate
Date: March 15, 2009

The Washington Post broke the story, but it's the only paper not to lead with "bailout king" AIG's plans to pay out about $165 million in bonuses to 400 employees in its financial products division. Yes, the New York Times reminds us, that is "the same business unit that brought the company to the brink of collapse last year." Or, as the Los Angeles Times puts it, the division that "created trillions of dollars in murky financial obligations," leading to government fears that "the entire financial system might collapse." A commenter on the NYT's Web site sums it up well: "This is so outrageous it is almost humorous."

While fronting AIG, the Post leads with the startling news that at least 3 percent of Washington, D.C., residents have HIV or AIDS, "a total that far surpasses the 1 percent threshold that constitutes a 'generalized and severe' epidemic," according to a report to be released on Monday. That leaves it on par with Uganda and some parts of Kenya, says Shannon Hader, director of the District's HIV/AIDS Administration.

The NYT and WP begin their articles on AIG with anonymous accounts of the Obama administration's "deep consternation" and "outrage" over the bonuses, resulting in a "confrontation" between the firm's chief executive and Tim Geithner on Wednesday. Only the LAT gives early mention to the fact that the payments have "the grudging consent of the Obama administration." Geithner may have thought the bonuses were "unacceptable" last week, as the WP and NYT dutifully report, but he eventually came around to the opinion held by Edward Liddy, AIG's government-appointed chairman, that the company was legally bound to make the payments. .header_wrapper {text-align:center}

In a letter to Geithner, Liddy justified the bonuses by arguing that AIG would have trouble attracting and retaining talent "if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." Aren't most Americans now accustomed to continued and arbitrary adjustments to their wealth? The LAT notes that Liddy's statement amounts to an anger-inducing yet logical concern that "AIG's losses … could spiral enormously if the only people who understand the company's convoluted dealings are not around to 'unwind' the damage they have caused."

If AIG's financial employees did seek employment elsewhere, there's a good chance it would be at one of the firm's trading partners. Ironically, these companies are only still in business thanks to the government's rescue of AIG. But, despite repeated inquiries from Congress, the government won't say which companies received bailout money via AIG. The NYT says "the secrecy is unacceptable."

Meanwhile, in an effort to get the world economy moving again, the NYT and WP report that G-20 finance officials agreed on Saturday to take "whatever action is necessary." Then they disagreed over what action is necessary.

When John McCain proposed the idea, Barack Obama called it "the largest middle-class tax increase in history." But now the NYT is reporting that Barack Obama "could support taxing some employee health benefits" to help pay for health care reform. Once again, Obama will let congressional Democrats take the lead—"several advisers say that while he will not propose changing the tax-free status of employee health benefits, neither will he oppose it if Congress does so."

Some have pointed to Obama's push for universal health care as proof that he is a socialist. But the editor of Socialist magazine writes in the WP that his kind "know that Barack Obama is not one of us." He then thanks Mike Huckabee and John McCain for being the Socialist Party's "most effective promoters."

Having dropped Jeremiah Wright, Barack Obama now turns to five pastors for support, reports the NYT. One, the Rev. Jim Wallis, says he hit it off with Obama because they're both progressive Christians—"We didn't think Jesus' top priorities would be capital gains tax cuts and supporting the next war."

An estimated 76 million Americans are made ill by contaminated food each year and Barack Obama is sick of it. The WP and NYT report that the president promised to bolster America's food-safety system yesterday, while saying he would nominate Dr. Margaret Hamburg, a former New York City health commissioner, to be commissioner of the F.D.A.

The WP reports that on Saturday morning former Pakistani prime minister Nawaz Sharif told a group of journalists, "I am ready for reconciliation with [President Asif Ali Zardari], as long as he is also ready." He's not ready. The NYT reports on its Web site the late-breaking news that police detained Sharif early Sunday morning, hours before he was to address his supporters in Lahore.

In Iraq, the NYT and WP report that Jalal Talabani will not seek another term as president. "When he steps down there is all but certain to be sharp competition between Sunni Arabs and Kurds for the post," says the Times.

Also from Iraq, the NYT reports a (saddening) sign of progress: There have been some 10,000 killings in Baghdad since December. The unfortunate victims are all members of the same Canidae family.

Going with the flow ... The NYT reviews a book that compiles women's memories of their first menstrual period. The Times somewhat regretfully predicts that the "distinctive" compilation "is bound to provoke snickers, if not sneers." Of course, it doesn't help if you name the work "My Little Red Book" and title the review "There Will Be Blood."