Just posted at C-SPAN, a reprise of an exchange mentioned in today’s Journal mini-bombshell describing how Geithner’s senior aides have in fact been working on the AIG bonus issue for months. The clip’s fascinating in its prescience in three respects: The ineptness of Kashkari, the Treasury rep; the grandstanding outrage of Sherman, the congressional inquisitor; and the fact that practically no one paid any attention to this at the time, underscoring how trivial the issue is amid the galaxy of worries about TARP and The One’s recovery program. Ironically, the AIG clusterfark is one case where the administration did prioritize, focusing so much on big-picture bank rescue that it let the bonus issue slide off its radar. Although, if Gallup’s right, the story ends happily for TurboTax Tim: 46 percent blame AIG management for the bonuses, 19 percent blame Congress, and only 8 percent blame Geithner.
Exit question: Is J.P. Morgan’s decision to drop $138 million on two new corporate jets and a hangar after receiving $25 billion from TARP the next outrageously outrageous populist outrage? Or is it the fact that TARP banks are dumping money into the campaign coffers of the same congressmen who supported their bailouts? Commenters were defending the jet purchase this morning in Headlines on grounds that it stimulates the aviation industry, which is true but could just as easily have been done by carving that $138 million out of their TARP package and tacking it onto the stimulus as a payment to Boeing. If the goal of TARP is to recapitalize banks and/or get them lending again, why are they making luxury purchases before that goal’s been reached?