Scapegoating Edward Liddy
posted at 10:58 am on March 19, 2009 by Ed Morrissey
Andrew Malcolm makes a good point regarding AIG chief Edward Liddy and his appearance yesterday on Capitol Hill. Lawmakers from both parties took the opportunity to throw brickbats at Liddy for the executive retention bonuses paid by AIG last week, before it became clear that the Obama administration worked with Chris Dodd to enable the payouts. Democrats apparently tipped off their allies in the fringe group Code Pink to lend the gladitorial-circus air necessary for a really good pillorying.
But Liddy didn’t create the bonuses or run AIG into the ground. In fact, as Malcolm reminds us, Congress and Treasury begged Liddy to rescue AIG last September, and at the lowest possible salary:
Chances are good no one will ask Obama today about the T. G. words (Timothy Geithner). And if they do, the president can repeat his support of the embattled Treasury secretary who may or may not have screwed up on the AIG bonus issue and the president will quickly change the subject away from those petty partisan concerns and back to his own grand agenda for the nation’s good.
Who wants to witness Edward Liddy, who was summoned from retirement only in September as the federal financial paramedic of AIG for the outrageous annual salary of $1, bludgeoned mercilessly for the cameras by the overpowering, hyperbolic hypocrisy of congressmen and women who awarded themselves $4,700 raises in this winter of economic duress? Those raises, making their annual salaries $174,000, will cost taxpayers an extra $2.5 million this year; call it “a bonus.”
Liddy inherited the contractual obligations of retention bonuses. Moreover, as we have seen, the Obama administration knew all about them — and pushed Dodd to rewrite his amendment to enable the payouts. Liddy could have refused to pay them, perhaps, but it certainly looks as though the Obama administration tacitly wanted the payouts to help retain what talent remained in the units that were getting eliminated.
A better question is why Liddy chooses to stay at AIG after this shameful episode. While Congress and the administration secretly worked to allow the payments, Liddy gets blasted in Congress by the likes of Barney Frank, one of the chief authors of the economic collapse. They hired Liddy to be a fall guy, a man they could use to generate populist outrage in order to distract people from the people who created the catastrophe — and they got him at the bargain rate of $1.
If I were Liddy, I’d tell them where to stick their dollar and go back to retirement.
Andrew has a lot more on the administration’s attempts to distract people from the incompetence in DC. be sure to read the whole column.
Blowback
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The next thing that you know, the fed will print another trillion dollars…….
Johan Klaus on March 19, 2009 at 12:29 PM
I’m neither a political scientist nor a historian, but I did enjoy some courses in college too many years ago. But I have to say that voters are guilty and members of congress are guilty.
Voters are guilty to the extent that they vote for useless representatives for their districts and for useless senators from their state solely for whatever money they promise to bring back to the state. It’s the only way to explain people like Ted Stevens (Alaska), Murth (PA), Dodd (CT), and too many others. Shame on those voters for being so selfish that they vote for members of Congress who are willing to sacrifice the overall good of the country for their geographical or ideological constituency.
Members of Congress, as I suggest, are also guily because they don’t conduct themselves in a manner that promotes the good of the country. Instead, they look only for themselves. These people aren’t statesmen (sorry, don’t know a gender-neutral term), they’re snake-oil salespeople.
BuckeyeSam on March 19, 2009 at 12:32 PM
Reality is that both sides need the other. People need jobs that pay the money they use to buy what they need and if possible what they want. Businesses need workers. Both sides deserve fair compensation and fair taxation. What happens though is that businesses are unfairly targeted since they are seen as a faceless entity that is easy to denigrate.
Onerous taxes and regulation end up hurting the working class worse than businesses though, since these businesses can find friendlier tax situations elsewhere, along with plenty of labor. The workers are left holding the bag and looking for another job.
Typical liberal consequences, they hurt the very people they claim to want to help.
Jvette on March 19, 2009 at 12:33 PM
Why doesn’t Congress take a dollar-per-year pay for their fabulous performance over the past year?
TexasJew on March 19, 2009 at 12:35 PM
Ed, you have to stop saying things like this. Word will get out and before you know it, people will start believing it! This truth telling is just getting in the way of blaming everybody else! It must be stopped!
Mr_Magoo on March 19, 2009 at 12:35 PM
After watching Liddy yesterday, I suspect he has too much integrity to resign. He seems to really care about his employees and doing a good job. (Yeah, I know, a rarity these days.)
Good for him. But I DO wish he would have pointed out to Barney Frank that his AIG political contributions were TWO HUNDRED THOUSAND times as much as Mr. Liddy’s salary.
jeanneb on March 19, 2009 at 12:42 PM
Similar denigration of unions occurs, albeit from different people…but of course i understand what you’re saying. The balance you refer to, however, is never truly served by either dem or rep administrations. each are too busy with their base and their social agendas to strike balances that involve concessions from both sides. its a shame really.
ernesto on March 19, 2009 at 12:44 PM
How many candidates were speaking of the subprime bailout on the campaign trail December 2007?
http://hotair.com/archives/2007/12/07/housing-bailout-backlash/
How much more expensive did the bailout get for the taxpayer while Congress dithered and the candidates preened for the cameras?
Term limits anyone?
Angry Dumbo on March 19, 2009 at 12:45 PM
enesto, not that I really care. But I wonder if you make a conscious effort to never respond to comments I make to you.
I assume there is every chance you just don’t see them. I’m sure the context sometimes might be OT and beneath you. This is a bit of a hot button issue for me though and I’m very curious what you think.
My question is, how after so many have died in the war with the left dragged kicking and screaming to support the effort (if they did at all), why should I care about your 401K? Is it because you think the economy really will collapse if we don’t turn to Socialism completely? If I don’t want Socialism, is it okay for me to want the plan to fail? Why should I care?
hawkdriver on March 19, 2009 at 12:46 PM
Perhaps if half of Congress wasn’t running for POTUS (TOTUS?) last year, the fix for the subprime lending mess would have been less expensive.
Angry Dumbo on March 19, 2009 at 12:56 PM
Thank you for making it more difficult to pass Bloated Bacon Stimulus II. We should be throwing laurels at your feet.
CynicalOptimist on March 19, 2009 at 12:56 PM
Well in this instance im lost as to what exactly youre getting at. are you saying that only liberals have 401k’s? beside, who said anything about plans failing or succeeding? all i did was make a point about the rhetoric, that obama basically called out some in business as playing chicken with the economy…much in the same way the auto workers union did during the GM bailout proceedings.
what that has to do with socialism im not quite sure. id love to answer your question if i knew what you were asking.
ernesto on March 19, 2009 at 1:02 PM
The unions are just as bad as Congress. The leaders are more concerned with their own power and compensation than the health and wealth of its members. They have robbed the pension plans, used dues to support political agendas that ultimately harm working people and fattened their own bank accounts, and created burdens are companies that have forced them to move to other countries.
You are correct that there is no balanced representation for either business or labor in Congress. The ideal would be that both sides are represented and compromises reached that are fair to both sides. A pipe dream in this current environment.
The truth though is that while working class people cannot and do not provide their own jobs, business can relocate and still find labor. Both sides need each other, but only one side (labor)is absolutely dependent on the other.
Jvette on March 19, 2009 at 1:14 PM
This is how they did it in Russia. They decide long after a contract is written and signed , how they want it to read.
It seems clear to me these bonuses may not have been retention bonuses but performance bonuses. SJust calling them retention bonuses after the fact seems dishonest. I have looked at previous annual reports and the pattern of incentivized compensation for revenues has been going on for many years.
One liberal even had the nerve to re name compensation as corporate bribery.
seven on March 19, 2009 at 1:17 PM
It had to do with this comment.
Maybe I misunderstood, but I gather you think there are people who would prefer for the economy to fail to be “vindictive” and you call that petty. I’m not sure what your comments have even been about the war or the lefts non-support of it, but I gather you lean to the liberal side and have an opinion.
From my point of view, the fairly periodic loss of comrades from my unit in Iraq and Afghanistan while Democrats engaged in petty (and quite often vicious) political games stateside, far exceeds what I would personally consider petty vindictiveness. The liberal outrage (not you, you’re admittedly a less impassioned commenter than me, I admit) but outrage in other quarters that we don’t drop to our knees and beg the administration to allow us to support what we think is a slow but steady march to at the very least, a Socialist society for the sake of an economy in recession. I personally see it as another way of losing the war.
I would have loved the liberals to go against their better judgment and try to support the war the same way they’re asking us to support the bailout. Am I misguided?
hawkdriver on March 19, 2009 at 1:21 PM
Had I been Liddy, I’d have told those Congressmen to shove it up their hypocritical asses and walked out.
GarandFan on March 19, 2009 at 1:27 PM
The encouraging atlas to shrug comment came from a line in Ed’s original post…but more broadly is refers to the way people are recommending business take it upon itself to stop functioning in light of Obama’s tax, regulatory, and now fiscal plans. You hear recommendations that people pull out of the Dow because the capital gains rate will go up and better to “show them” than still make money, albeit less. Same with business. you hear people recommend that they simply shut down rather than make less money…not no money mind you.
personally i wouldnt go about things in the same way Obama is at the moment, but i do find rhetoric encouraging an “atlas shrugged” moment over a slight shift in regulatory and tax climates a bit much.
ernesto on March 19, 2009 at 1:30 PM
I agree..Liddy should quit. The ones who should be grilled in front of Congress are Obama, Geitner, Dodd and Frank.
What a spectacle this Congress is.
becki51758 on March 19, 2009 at 1:52 PM
Ah, Code Pink. THE organization for people whose life has no meaning that want to keep it that way.
Red Cloud on March 19, 2009 at 2:16 PM
Maybe I framed my comment and question poorly.
I’ve read “Atlas Shrugged” and I understand the concept. My point here ….
…was that liberal America has already had it’s Atlas moment where they refused to support American. The difference with the war was it wasn’t 401Ks on the line but life and limb. For the country to fail there guaranteed a greater menace abroad that we’d have to defend ourselves against in the future. If you consider the political antics in Congress with war funding, you can very easily argue that Democrats used money as a weapon like it sounds you’re asserting business and Conservatives are doing.
It was a quote from the thread talking about “encouraging atlas to shrug” but what I was asking about was your comment that it was petty vindictiveness. I guess I just can’t separate the irony of people pleading with us to support the administration now for some bucks, in a venture that a lot of people think is Socializing this country after people begged liberal America to get behind their troops.
hawkdriver on March 19, 2009 at 2:21 PM
There has to be something more going on.
Liddy doesn’t need the job.
Anyone with self respect would have told Congress to go to hell and resigned.
The fix is in and Liddy’s in on it.
Rick9911 on March 19, 2009 at 2:37 PM
I see the irony, though i wouldnt necessarily attribute it to the typical liberal feelings on the war. if anything, the liberal equivalent would be the way the UAW played chicken with GM when it was facing bankruptcy.
also, i for one cant defend the position of congressional democrats that precipitous withdrawal was necessary. though i believe our entry into that war was misguided, i was one to insist that now that we’re here, we’d damn sure better win. it was deplorable that boneheads like reid and pelosi decided failure was an option. democrats did try to play chicken over all this. that was petty and vindictive.
that said, you’re pretty much correct. though the analogy is imperfect, in that we had a clear option NOT to go to war with iraq while this financial disaster was the result of a decades of negligence.
ernesto on March 19, 2009 at 2:46 PM
Totally. Go Galt, Mr. Liddy.
holygoat on March 19, 2009 at 2:48 PM
im sure you’re 401k would appreciate the whole investor class going galt. why recommend it only to Liddy?
ernesto on March 19, 2009 at 2:53 PM
Sorry Mr. Liddy. No good deed goes unpunished.
el rey on March 19, 2009 at 2:59 PM
There is NO conservative presence in Congress to oppose the Obama agenda. The Liddy tax passed with significant Republican support.
This is going to be a LONG 8 years.
Angry Dumbo on March 19, 2009 at 3:07 PM
That’s what I’m talkin’ about. Liddy showed a remarkable amount of restraint. If it had been me sitting there, Fox News would have had to bleep out 3/4 of what I said.
uncivilized on March 19, 2009 at 5:51 PM
Fair comment and glad you feel the way you do. Thanks for taking the time.
hawkdriver on March 19, 2009 at 6:03 PM
…and watch as his attempt fails, horribly.
It’s not as if the government can’t extract a dollar from any place on the earth if it wants to.
Liddy is deserving of any blame for not doing something against those bonuses. Asking for them back doesn’t count. Action to claw them back (wherever on the planet) from the recipients does.
sethstorm on March 19, 2009 at 8:20 PM
You obviously have no clue how contracts work. There was absolutly nothing Liddy could have done anyone honest person who has ever signed a legally binding contract knows that. The only way those contracts could have been modified was by AIG entering into a Chapter 13 restructuring.
doriangrey on March 19, 2009 at 10:05 PM
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