There was much fanfare in March of last year, when an indignant AIG vice president, Jake Desantis, quit in a huff over the great injustice of being asked to forfeit a portion of his enormous bonus by dint of the fact that the firm that was scheduled to pay that bonus would have gone bust absent a massive infusion of taxpayer dollars.
But to Desantis, and his many defenders, this was unconscionable, and a distressing sign of looming class war and hoary socialism, etc.
Then, early this month, AIG made the following announcements:
American International Group plans Wednesday to pay another round of employee bonuses, worth about $100 million, said several people familiar with the matter, a year after similar payments at the bailed-out insurance giant infuriated many Americans and inflamed Washington.
This week's retention payments go to those employees at the company's Financial Products division who agreed recently to accept 10 to 20 percent less money than AIG had initially promised them two years ago. In return, they are to receive their payments more than a month ahead of schedule.
The company is still scheduled to pay out tens of millions of dollars more in March, mostly to former employees who did not agree to the concessions.
AIG executives have been scrambling to hammer out a compromise before March 15, when the firm faces a deadline to pay nearly $200 million in bonuses to employees at Financial Products, the unit whose risky derivatives deals brought the insurer to the brink of collapse in 2008. Government and AIG officials have been eager to avoid a repeat of the public furor that erupted last March when an earlier round of payments -- worth $168 million -- went to the same set of employees. [emphasis added]
It appears that the expedited timeline might have take on an added sense of urgency due to some, shall we say, inconvenient facts for those asking for millions of dollars in bonuses for their stellar performance:
AIG, the bailed out insurer, said on Friday that it lost $8.9bn in the fourth quarter of last year, as charges on its massive debts weighed down its performance. [...]
In a filing with the US Securities and Exchange Commission, AIG noted that if management’s plans do not move forward as stated, “AIG may need additional US government support to meet its obligations as they come due”. Moreover, it warned that without additional support in such a scenario, there could be “substantial doubt” over AIG’s ability to continue as a business.
Awesome. But let's not question the insanely high levels of compensation we're paying out on the taxpayer's dime. Any suggestion that losses should be borne by the private sector is socialism. Unless we're talking about the blue collar labor force - in which case, government assistance to help those affected by market losses is also socialism.
I know it's a bit tricky to follow, but such is the magic of free market capitalism.
Words of wisdom regarding personal communication protocol from Mithras:
Text Me, Email if Text is Too Short, Don't Call Unless Someone's Dead, And For F*ck's Sake Don't Leave Me a Voicemail No Matter What
I wish I could include that on some universal business/personal card, and provide one to each person I know (probably with less colorful language).
Especially the part about the voicemail. The worst possible abuse of communication technology is when someone leaves you a voicemail and says some variation of either: (1) "Hi, just calling to say hello"; or (2) "Call me."
See, you could have sent me a text message with either of those sentiments, but instead you made me dial my voicemail, listen to the intro, listen to your message and then press buttons to delete the thing.
White House press secretary Robert Gibbs tweets, "Senate proves bipartisanship possible -- 70 support tax cuts for businesses who hire the unemployed plus more investment in infrastructure." Except, just a few days ago, the Senate had to block a Republican filibuster of the jobs bill, which they did with only 62 votes. That means eight Republicans voted to block all discussion of this bill, then switched to vote for it. They've delayed the Democratic agenda, meaning that these much-needed programs will be implemented a few weeks later and a be a little less effective, while taking credit for any benefits that may accrue as a result of this bill.
It's a shame that there aren't enough Democrats with the courage and foresight to revise the filibuster rules. Requiring a supermajority in a legislative body that is already less than democratic in terms of representation per population creates an ungovernable conundrum.
Further, can we please just kill the cult of bipartisanship once and for all? It's an illusion - or at the very least, it doesn't work when one party's trying to do it.
Tomorrow, President Obama will gather with Republicans for the long-awaited televised health care summit. Obama will promote his health care proposal, the Republicans will demand that we start over.
Even House Minority Leader John Boehner dimly senses that the GOP is walking into a trap. The public is thoroughly sick of the health reform process, but people still like the idea of health care reform. So, the GOP can't just say "kill the bill" in public. Instead, Republicans have to make disingenuous speeches about "starting over," knowing full well that if health care reform dies now, it'll stay dead.
Boehner must realize the prospect of starting over is about as appealing as National Root Canal Week at the DMV. But what can he do? The Republicans have no ideas beyond "tax cuts cure cancer." And they can't boycott the summit, or they'll lose the "bipartisan" blinking contest.
So, when Obama gets on TV and lays out his reasonable-sounding plan, complete with protections against private insurers who want to hike your premiums 39% overnight, he's going to sound good and the Republicans are going to sound crazy.
Brilliant tactician Boehner is now exhorting Republicans to "crash the party" they've already been invited to.
This post from Kevin Drum ties-in nicely to recent conversations on this site:
Sure, you already know this. But it never hurts to post a reminder with a nice graphical memory aid. Nickel summary: the richest of the rich have gotten even richer over the past two decades — 400% richer for the top 400, according to CBPP, in a nice bit of symmetry — and at the same time their federal income tax rates have gone down from 30% to 16%. Needless to say, this is further evidence that America's heirs and Wall Street tycoons, the targets of endless class warfare from liberals and Democrats, deserves to have the estate tax eliminated. They've suffered enough already.
The low effective tax rate for the top 400 filers is largely due to the fact that capital gains and qualified dividends are taxed at much lower rates than ordinary income....It is not surprising that two of the largest reductions in effective tax rates for the top 400 filers occurred in two two-year periods (1996-1998 and 2002-2004) that coincided with the capital gains tax cuts enacted in 1997 and 2003.
The graphical aid in question is to the right.
In essence, over the past 15 years (and counting), our government has implemented policies in the pursuit of a massive redistribution of wealth. But it's socialism in reverse - complete with a system of privatized gains and public borne losses when the same millionaires, and the financial institutions they run, that benefit from our upside-down tax system, wreck the economy. The same economy they are paid such insane amounts of money to guide and protect. Which says nothing of the heiress set that doesn't even work, but benefits from the preferred treatment of passive income.
But don't expect a correction. The Obama administration, and its Democratic allies, not to mention its Republican opponents, don't seem inclined in the slightest to right the ship.
Employees of the CIA-connected private security corporation Blackwater diverted hundreds of weapons, including more than 500 AK-47 assault rifles, from a U.S. weapons bunker in Afghanistan intended to equip Afghan policemen, according to an investigation by the Senate Armed Services Committee. On at least one occasion, an individual claiming to work for the company evidently signed for a weapons shipment using the name of a “South Park” cartoon character. And Blackwater has yet to return hundreds of the guns to the military.
Here's the kicker, though, from Serwer:
Meanwhile, as Ackerman notes, Blackwater is still being paid by the State Department to protect American diplomats and Afghanistan, and is also in the running for a new contract to train the same Afghan police force they stole weapons from.
But wait, it gets worse (it always does with Blackwater):
A lawsuit filed by two former employees of Blackwater charges that the controversial security contractor defrauded the U.S. government, including charging it for strippers and prostitutes, the New York Timesreports.
Perhaps the most explosive charge in the lawsuit -- filed by a married couple, Brad and Melan Davis, is that the company put a Filipino prostitute in Afghanistan on its payroll under the "Morale Welfare Recreation" category, then billed the government for her salary and plane tickets.
The Davis's allege that Blackwater exercised little oversight of the billions in government contracts it has won over the last decade.
The lawsuit also claims that Melan Davis, who handled accounts for Blackwater's contracts with FEMA and the Department of Homeland Security, approached her supervisors with concerns about the company's book-keeping. But she was told to "back off," and that she "would never win a medal for saving the government money."
Davis was ultimately fired by Blackwater, now known as Xe. She claims the firing was illegal.
Considering recent legislation to withold government funds from ACORN, I think I understand the standard applied here, and it makes perfect sense: if some low level employees are caught giving advice (using a doctored videotape that greatly distorts the actual conversation) to a would-be pimp (not actually in costume), then the entire organization should be cut off from government funds entirely and in perpetuity. Can't have that.
However, if an organization on the government payroll actually pimps out a prostitute for employee "use," well then, no harm, no foul, boys will be boys, etc. Get it? Or, as Serwer puts it:
The Senate is holding a hearing today where several current and former Blackwater employees will be testifying, but honestly the only way Congress would stop giving Blackwater money is if it started registering black people to vote.
Anti-abortion activists often claim that exemptions from abortion bans for life/health of the mother provide too-wide a loophole and allow for de facto legal abortion. However, this is what abortion bans without such exemptions look like:
The cruelty of Nicaragua's extreme abortion ban is undeniable in the case of Amelia (an alias), a 27-year-old woman with cancer. Passed in 2006, the law criminalizes abortion, even if the woman's life or health is at risk. Amelia, who has a 10-year-old daughter, needs to have an abortion so she can undergo treatment for the cancer, which may have metastasized in her brain, lungs and breasts. [...]
From a statement from...organizations [advocating on behalf of Amelia]:
Even though the treating physicians concluded that the patient requires an abortion to initiate chemotherapy and radiotherapy treatment, the young woman has been hospitalized since January 29th without being able to receive an abortion and therefore, without receiving any kind of treatment to stop the cancer.
Under these circumstances, Amelia is in imminent danger of losing her life, given the impossibility of accessing an abortion. Under current Nicaraguan law, women in need of therapeutic abortions to save their life or protect their health are in fact, sentenced to death. Additionally, in this case, her minor daughter would be orphaned.
In a recent piece in Foreign Policy magazine, James Traub struggles to divine the true nature of the Obama administration's foreign policy posture - in particular, the quality of the Obama administration's predisposition to pursue engagement with other regimes and institutions, regardless of the makeup of said organizations. In this, Traub agonizes over the potential willingness of the Obama team to compromise core values in the pursuit of perceived vital interests:
Virtually all conversations with Obama administration foreign-policy officials, no matter where they begin, come to rest at "engagement" -- that vexing, mutable, all-purpose word. The U.S. president has "engaged" with rogue states, civil society, the United Nations, and citizens around the globe. Iran vindicates the policy of engagement -- or discredits it. China is a failure of engagement, Russia a success. Inside the Obama realm, engagement has come to mean "good diplomacy."
Barack Obama himself arguably encouraged this view during his 2008 presidential campaign by criticizing George W. Bush's moralistic bluster, by regularly expressing his high regard for archrealists like James Baker and Brent Scowcroft, and by stipulating his willingness to meet "without preconditions" with even the worst tyrants. And since becoming president he has muted criticism of the regimes in Sudan and Burma, and referred respectfully to "the Islamic Republic of Iran." [...]
But is [Obama-style engagement] not, still, a realist bargain, trading away those universal values that the president so often evokes in the hopes of geostrategic wins, whether on Iran or climate change or the global economy? [emphasis added]
Given that Traub recently penned a book on the subject of the role of democracy promotion in U.S. foreign policy, it would be hard to fathom that he is naive on such matters, and yet, so much confounding naivete is communicated in this piece (I prefer that interpretation to deliberate obfuscation).
The short rebuttal is that Obama, like every single President that preceded him, is likely willing to trade away values that are extolled rhetorically in exchange for "geostrategic wins." This is how it has always been. Treating it as a new development is ahistorical at best.
Further, how curious to fret about mere diplomatic engagement with Iran's regime - which Traub includes under the rubric, "worst tyrants" - when we not only engage on a diplomatic level with brutal, oppressive, undemocratic regimes in the region like Pakistan (until recently, a military dictatorship), Saudi Arabia (monarchy), Jordan (monarchy), Egypt (de facto hereditary dictatorship), etc., but we often lavish those same despotic regimes with generous aid packages, including top-of-the-line military equipment.
Not to mention that our closest ally, Israel, whose relationship with the U.S. is sacrosanct and whose conduct we never criticize (or even allow the UN to criticize), currently oversees an apartheid state, and commits grievous human rights abuses against the beleaguered populations in the occupied territories, as well as war crimes in its maintenance of control thereof.
And yet, the continuation of those relationships receives far less scrutiny and is not treated as an existential moral crucible for sitting Presidents in the same way that potential negotiations with North Korea and Iran are (see, also, U.S. government relations with China, Vietnam and other communist countries, but "principled" refusal to "appease" the Castro regime because...it's communist).
In fact, though imperfect in obvious ways, Iran's political institutions are more democratic, and less tyrannical, than most of our longtime favored allies in the region. Not to mention that before the Iranian revolution in 1979, we did engage the Shah's regime (which, tyrannically, maintained power with the aid of the notoriously brutal SAVAK secret police) and favored him with money, state of the art military aid and other niceties. To tell the whole story, we not only supported his regime, we helped stage a coup in the 1950s, toppling the democratically elected regime in Iran, and replacing it with the Shah's dictatorial rule.
But let us ponder whether Obama's decision to engage the Iranian regime represents some serious compromise of American values.
It's almost as if Traub is confusing Bush's bluster for actual policy, and seeking to draw a contrast between Obama and his predecessor, when in reality, little has changed over the past century or so of U.S. foreign policy. Don't be fooled by a couple of old-school, self-interested military campaigns in Iraq and Afghanistan that were packaged with a flimsy veneer of magnanimous "democracy promotion."
Dick Cheney might have intoned, defiantly, that "we don't negotiate with evil" with respect to the regimes in Iran and North Korea (and Iraq, presumably - after Saddam was a favored ally during the Reagan administration), but those words were uttered at the same time that the Bush administration was maintaining the aforementioned relations with regional despots, as well as pursuing a working relationship with Islam "Boil Dissidents Alive" Karimov for purposes of facilitating the war effort in Afghanistan - not to mention implementing policies of preventive war, torture, detainee abuse and indefinite detention that were themselves tyrannical.
One way that various U.S. regimes have tried to paper over the persistent hypocrisy of word and deed is to stuff wads of propaganda in the widening gaps between rhetoric and reality. In pursuit of this, regimes/groups that are amenable to our particular foreign policy goal are arbitrarily described as "democratic" and "moderate" (like Saddam when he was fighting Iran), while those regimes/groups that oppose our agenda are, by nature, "extremist" and "tyrannical" - even though there is often little rhyme or reason to the classification beyond our own ulterior preferences.
It is when we confuse the facade created by spackling the cracks with smooth reality that we look most foolish to foreign populations that are less mesmerized by our self-gratifying, exceptionalist propaganda. I'm reminded of a recent Rami Khouri piece in the Daily Star:
We are told that [Secretary of State Clinton's] trip to the region has two main aims: to strengthen Arab resolve to join the United States and others in imposing harsh new sanctions to stop Iran’s nuclear development program; and to harness Arab support for resumed Israeli-Palestinian negotiations. In both of these critical diplomatic initiatives the US has taken the lead and achieved zero results...
The weakness in both cases, I suspect, has to do with the US trying to define diplomatic outcomes that suit its own strategic objectives and political biases (especially pro-Israel domestic sentiments). So Washington pushes, pulls, cajoles and threatens all the players with various diplomatic instruments, except the one that will work most efficiently in both the Iranian and Arab-Israeli cases: serious negotiations with the principal parties, based on applying the letter of the law, and responding equally to the rights, concerns and demands of all sides.
Two Clinton statements during her Gulf trip this week were particularly revealing of why Washington continues to fail in its missions in our region. The first was her expression of concern that Iran is turning into a military dictatorship: “We see that the government of Iran, the supreme leader, the president, the Parliament, is being supplanted, and that Iran is moving toward a military dictatorship,” Clinton said.
Half a century of American foreign policy flatly contradicts this sentiment (which is why Clinton heard soft chuckles and a few muffled guffaws as she spoke). The US has adored military dictatorships in the Arab world, and has long supported states dominated by the shadowy world of intelligence services. This became even more obvious after the attacks of September 11, 2001, when Washington intensified cooperation with Arab intelligence services in the fight against Al-Qaeda and other terror groups.
Washington’s closest allies in the Middle East are military and police states where men with guns rule, and where citizens are confined to shopping, buying cellular telephones, and watching soap operas on satellite television. Countries like Egypt, Jordan, Tunisia, Libya, as well as the entire Gulf region and other states are devoted first and foremost to maintaining domestic order and regime incumbency through efficient, multiple security agencies, for which they earn American friendship and cooperation. When citizens in these and other countries agitate for more democratic and human rights, the US is peculiarly inactive and quiet.
If Iran is indeed becoming a military dictatorship, this probably qualifies it for American hugs and aid rather than sanctions and threats. Clinton badly needs some more credible talking points than opposing military dictatorships.
From the days when the U.S. began establishing its colonial fiefdom in Central and South America, through the Cold War and now the ill-named War on Terror, the primacy of democracy promotion as a goal of U.S. foreign policy has been tenuous at best. All things being equal, and in nominal ways when doing so creates some minor friction, the U.S. will support democracy promotion. Immanuel Kant would not be impressed with our sense of conviction.
Worse still, we have also been willing to actively interfere with democratic elections through massive infusions of cash and propaganda in favor of preferred candidates in locales from Central and South America, to Italy, West Germany and France. In Japan, we plucked war criminals off death row and forged a political party with them at the lead that has maintained power (again, with massive amounts of aid from the CIA) almost unchallenged until relatively recently. We instigated coups to topple democratically elected regimes in favor of brutal dictatorships in places like Iran, Guatemala and Chile (not to mention failed attempts in several other nations). All along the way, we've coddled, armed, funded and propped-up all manner of nefarious dictator, monarch, despot and tyrant when doing so was deemed in our interest.
I would recommend that Mr. Traub familiarize himself with his New York Times colleague Tim Weiner's work, which documents these many episodes using declassified government documents.
So, please, let's not pretend that a decision to engage the Iranian and North Korean regimes represents some break from precedence or compromise of our values, or that there is anything "principled" about maintaining the counterproductive diplomatic cold shoulder. Engaging these regimes is not hypocritical. The hypocrisy is actually pretending that such diplomatic outreach would be unique, inconsistent or at all out of the ordinary.
In answer to your question, Professor Reynolds: Yes. If the US Government defaults on its obligations, the US will be forced to run a balanced budget. This because no one will lend a single dime to the US. Kinda like Zimbabwe. Which is not a good thing. (Ask Zimbabwe.)
By the way: I don't know what you were hoping for, but I don't think that Bruce Bartlett's response to your "idea" is intemperate. He's pretty much right on. You're suggesting the equivalent of: "If we kill the patient, he'll be cancer free!"* Do you expect a sensitive correction? When a law student shows up at your class and tells you that RICO was Lucille Ball's husband, how much slack do you cut that dude? Because that is the exact amount of slack due to you, Professor.
I mean, sorry if your feelings got hurt. Still: If a public intellectual -- you -- says something idiotic in a public space, he or she needs to be corrected. Quickly and decisively. Particularly in the present case: Osama bin Ladin is one tenth of a percent as dangerous as your idea. (That is not hyperboyle. Your suggestion is seriously, dangerously stupid. Indeed, it's so stupid I'm going to spell it out for you: S-T-P-I-D. Yeah, that's right. Your idea is so stupid that, because of it, you can now spell stupid without a "u". Your idea's stupidity has bent the laws of grammar. Put that in your pipe and smoke it.)
On the bright side, you're unlikely to be waterboarded for saying something stupid. Even as stupid as this post.
So you've got that going for you.
*Except, in this case, it's impossible to kill the patient. See Bartlett's blog post. Dumbf_ck.