Analysis: Obama Slip AIG gives custody of the economy

 

Monday, Mar 23,2009, 11:48:06 PM   Click:

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Source: Associated Press Worldstream
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WASHINGTON_President Barack Obama has largely avoided being chained to the policy of massive government rescue of U.S. financial system.

No more.

Rightly or wrongly, it is now the owner of the very unpopular need for the system at a cost that May _ up to $ 2.5 trillion and beyond. Worse, the new administration would be upset if she should return to Congress for more bailout money. Obama said it was likely.

The White House had little choice after a political storm, one of the largest in recent years, blowing through Washington and the United States in terms of leaks last week that American International Group Inc, the giant of insurance and investment already at least $ 170 billion in hock to the U.S. taxpayers, was to pay $ 165 million in bonuses.

The salt in the wound: The payments went to those who worked in the AIG Financial Products unit that brought the company to the brink of collapse.

Until then, Obama and Treasury Secretary Timothy Geithner was able to float on the periphery of the bailout program, maneuvers American anger over the former Bush administration under which the $ 700 billion in spending rescue began.

Geithner acknowledged that more spending could become necessary, but his message wrapped in vague plans which, in theory, use the federal money already available as collateral to induce, or leverage, massive private spending to revive the financial system.

Some financial experts and Obama have complained that the criticism Geithner is not sufficiently clear about its plans, but seems ready to hold fire until the situation clarified.

In the meantime, however, Americans are becoming increasingly angry about the use of taxes to support large financial interests. The pressure is more intense on the members of Congress. Premiums AIG has become an escape valve and the cauldron of the integrated policy of bile spewed through AIG chief Edward Liddy, Geithner and, by association, Obama.


"Nobody here reads the (bonus) contracts," Obama said Wednesday. "Nobody here has been to oversee AIG and allow the economy endangered by some of the outrageous behavior they were engaged in. We are responsible, if. The responsibility stops with me. "

While Liddy said he was at work, with some success, to get the bonus money, Obama could not escape the fact that Geithner has allowed the payment to go ahead, citing contracts AIG has signed during the Bush administration.

The President and aid quickly flooded the media with the reassurance that they were outraged over bonus payments and insist they be called. But the policy has been damaged.

They face the task of trying to dig a deep hole that could have been avoided Geithner has only asked the right questions at the beginning of this month.

That's when Geithner approved $ 30 billion more for the rescue of AIG, without knowing or asking about the bonus time bomb. And the problem has fallen squarely on the White House. And there are calls by some Republicans in Congress for the resignation of Geithner. Obama, so far, stands firmly behind his Treasury Secretary.

Polls show Obama approval rating with Americans remains high but has decreased in recent days. The explosion of AIG and Obama on the need to take charge in May announced a further decline. Men and women are worried about paying their bills and keep their jobs in the deepening recession are up against the policy to see more of their tax dollars paying the premium finance.

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Steven R. Hurst, AP international political writer and covers the White House.



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