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.