Be transparent or be expedient

After reading this article on Huffington Post, I’ll have to agree on some of its points. Though I strongly dislike some quarters cooking up a big fuss over the AIG issue for the sake of political points, the issue of transparency and integrity in this case trumps above all else. Someone in Obama’s administration killed a provision in the bailout deal with AIG that explicitly curtailed those bonuses but it was withdrawn. The amendment to curtail it was drawn up by Sen. Wyden.

Building on public outrage and presidential denunciations of executives at bailed out companies getting bonuses, Wyden and his Republican colleague, Sen. Olympia Snowe, crafted a provision in the stimulus bill that would have forced bailout recipients to cap their bonuses at $100,000 (any amount above that would be taxed at 35 percent).

According to Wyden, he “spent hours on the Senate floor,” working to get the bipartisan amendment passed. He succeeded — not a single Senator voted against the provision. “But,” says Wyden, “it died in conference.”

So who killed it? Wyden doesn’t know.

Now it starts to get weird. Who kicked the provision out ? Here in this interview with CNN, Treasury Secretary Geithner claims he only knows the “full scale and scope” of this issue on March 10 and they have explored every possible legal avenue to recoup the money. When pressed about whether he knew about the provision to allow the bonus payments in the bill back in November, his answers are a little dodgy and vague. He keeps hammering that his main concern is whether the legislation can stand up to legal challenge.

Here is current AIG CEO Edward Liddy’s letter to Geithner expressing concern about the government’s demands that could affect AIG’s ability to retain “the best and brightest talent to lead and staff the AIG businesses” if “employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.”

Here is National Economic Council Director Lawrence Summers about AIG spending hundreds of millions in bailout money on executive bonuses. He’s defending the fact that we need to prop up companies like AIG at all costs because of the ramifications it will have for the national and global economy. The consequences will be disastrous otherwise.

Here is a disclosure by AIG on the counter-parties who have received funds from the bailout money.

Now the argument about consequences will be dire if we don’t prop AIG up smacks somewhat of the excuse used by Bush to plunging the country into war with Iraq. Of course, to be fair, it’s not entirely an apples to oranges comparison. But the underlying point here is the outright honesty, integrity and transparency promised by President Obama when he takes office. That we should not trade basic common sense and conscience for expediency in solving problems. The problems afflicting AIG and the financial system are complex and dire but I don’t believe it is absolutely the worst thing to allow these companies to fail even if the repercussions are very painful. The laws of nature must be allowed to take its course and accountability must be assigned to the right parties. AIG is accountable for their own actions and they will have to fight to survive. But if they know that they cannot be allowed to fail, then they can end up more complacent and recalcitrant. Sometimes it is better to let them go and try and minimize the fallout. I don’t think we should risk trading off the basic values embraced by President Obama for supporting a failing organization out of fear for the consequences otherwise.

The bonuses and Republican conservatives

The hoopla and furor over the AIG bonuses has become the first real challenge to President Obama. The fallout is now being capitalized on by the opposing forces to wear down the formidable mandate armor that’s been shielding Obama from challenges. Supposedly patriots in the Republican camp are looking to turn the main street anger into better chances in the coming elections. As much as the bonus issue is an affront to our principles and values, so-called Republican patriots are also equally as guilty of the same crime. They are doing nothing more than using this issue to improve their political futures. Nothing productive can be achieved in blowing up this issue except to hand the conservatives ammunition to further prevent President Obama from revamping the country.

I don’t think these people even understand the scope of the problems that the country faces. For one, I don’t buy the argument that President Obama is doing what he’s doing purely for his own ego or political gain or simply for the heck of it. As much as Americans hate to face this, America is already a country heading towards decline. Of course this is against the backdrop of the world’s other emerging countries and societies. The world is catching up with America but America is standing still. President Obama is just trying to reform America. Here, there is a gradual erosion of the basic values that makes any society great. Values like hard work, honesty, integrity and generosity are gradually eroding away. The total belief by the conservatives in minimal government, free market and religious evangelism have not resulted in a society of moral strength but instead have done more to foster myopic ignorance, self-indulgence, greed, intolerance and false patriotism. The Iraq war and the current economic malaise are nothing but a symptom of the creeping disease that is slowly consuming America. The economic infrastructure now is being threatened by the laissez-faire financial system, over-dependence on imported oil, huge debts, climate change, erosion of competitiveness due to deteriorating education system. These are systemic and broad problems whose effects America will start feeling in the near future. They are much, much bigger problems than the current hoopla over the AIG bonus.

The attention span of the American public and the media has now mainly revolved around soundbites. Their politicians, instead of leading them out of their myopic stupor, are now expert at manipulating and leveraging their constituents’ emotions. Their tunes are often at the mercy of the changing whims and fancies of their constituents. They are mostly as ignorant of world affairs as their constituents and lacks a long term view to issues. All I can say to those politicians now playing to the public anger is this : Either you lead or you follow or please, do us a favor, shut up and get the fuck out of our way !

Has Obama won yet

Well, I think a lot of people in the Obama camp would like to believe that the Obama campaign’s on a roll now. Here’s one BBC News take. Another one that gives Obama a 9-point lead. Reuters claims Obama making inroads into America’s wealthiest. Here’s CNN’s poll of polls. If you do a google search using “Obama point lead” as keywords, you’ll get one heck of a list in favor of Obama. And if you use “McCain point lead”, you’ll also get one heck of a list but, no they’re not in favor of McCain unfortunately for him. All this must sound like music to Obama’s supporters. The mainstream media have generally been more generous towards Obama than McCain during this campaign. Maybe because the journalists like Obama more, maybe it’s a historic election with the first African-American, maybe it just makes good viewership numbers. But the battle is far from over. I have a feeling that the onus and burden is heavier on Obama to win than McCain. He needs a convincing statistically safe advantage in the polls which he hasn’t quite achieve yet. In my view, Obama is __still__ the underdog and it’s only the current economic crisis that appears to turn the tide in his favor. But generally, his chief weakness of being inexperienced and being African-American still weighs in on the back of people’s minds and if McCain can bring that uneasiness to the forefront again, then the situation can still turn 180 degress. So it’s still up for grabs and if McCain stops playing lousy politics and be true to his core principles by focusing on solutions to problems rather than causing more problems, he can still up the ante.