Have you heard about the bonuses paid to the losers at AIG?  OK, that’s a joke because everyone has heard about how “the very employees responsible for running the company into the ground” are making off with millions in tax payer dollars as Senator Mark Warner wrote in a letter to the AIG CEO Edward Liddy.  Now I will never receive a seven figure bonus and I can’t figure out why a company would ever agree to pay one, but with that being said, I’m just not on the Bonus Bashing bandwagon yet.  It’s not that I think AIG is great.  It’s not that I’m especially sympathetic with the downward spiral that the formally high riding AIG folks are on.  The real reason that I can’t yet bring myself to go looking for my torch and pitchfork is that we really don’t know squat about these bonuses… and neither do the congressmen building ever higher soap boxes from which to denounce them.  What we don’t know so far:  who got the bonuses, why they got them, what were the criteria for receiving them.  What we do know: $165 million in bounuses were paid and a total of close to $1 billion is slated to be paid to around 4,600 top managers in 2009.  So do all our congressmen know what they are talking about?

I heard one congressman saying something to the effect of “how do any of these people deserve performance bonuses when their company is crashing?”  Let me say again that I don’t understand million dollar bonuses, but that said, I think it is perfectly reasonable that bad companies can have great employees.  Should the top salesman at the local GM dealership give up his bonus because GM is doing poorly?  What if GM accepts government money?  What if he sells a crappy car?  My thought is that if he was working to an incentive plan and he achieved his end of the deal, he should get his check.  Many employees receive some portion on their pay as variable compensation.  Every employee at the company where I work is on a bonus plan.  We don’t get millions, but everyone has the potential to get up to 10% of their annual pay based on performance.  For more senior employees the percentage is higher.  If I meet my objectives and targets, can the government take that money away?  Personally, I don’t consider this a “bonus”, I consider it pay.  How about that guy, Douglas Poling,  who received the biggest bonus: $6.4 million?  Turns out he was reponsible for trying to clean up the mess and his work resulted in AIG recouping big dollars, dollars that we taxpayers don’t have to pay.

Gerry Pasciucco, a former vice chairman of Morgan Stanley who was brought in by Mr. Liddy in November to wind down the financial products unit, said Mr. Poling had sold off roughly 80 percent of the unit’s assets. Mr. Pasciucco said the money from the sales would go to the government, which has handed more than $170 billion in bailout money to A.I.G. in the last six months.

“He’s done an outstanding job in winding down his investment books,” Mr. Pasciucco said. “He did it at the right time, and we’ve made money. We would be losing money today if we waited to sell some of these assets.”

By the way, our boy Doug gave the bonus back.

We’ve also read about “retention bonuses paid to people who have left the company.”  How does that make sense?  OK, from far away, I can question the wisdom of offering these plans, but let’s understand that these payments are made after the service term to employees that stayed last year.  For whatever reason, AIG offered to make a payment to employees who stayed in 2008.  When that period expired, they were entitled to the payment even if they left the company.  AIG was not government supported at the time, but was feeling heat.  Maybe they felt they needed to keep top performers.  I don’t know why they made these offers.  You don’t either.  I probably wouldn’t have offered such plans, but if I was offered one and accepted it in good faith to stay on a sinking ship, I’d consider my end of the deal complete.  Was management pulling a fast one?  Let’s go find out, but at least let’s hold our fire until we know the answer.

What has all the rhetoric achieved so far?  We’ve got dubious legislation attacking people’s pay passing in Congress without debate, security memos at AIG warning employees to beware of people seeking to do them harm and employees being harassed and attacked at their homes.  Does anyone besides me think we need to get the full story before burning people at the stake?

Rush LImbaugh has been crowned the leader of the Republican Party by the Democrats and to the humor of all, his fellow Republicans have kind of completed coronation.  So how should Rush use his new found power?  It’s clear that there is a void at the top of the Republican party and Rush has a large bully pulpit, so what should he do?  I have an idea for you Rush.

First, recognize that all those who try to speak for the Republican Party on the stimulus all have one thing in common:  They are completely unqualified to speak about the economy in general and our current crisis in particular.  Not that the Democratic congressmen and senators are any better, because they aren’t.  On one side of this crisis, you have Obama’s administration consulting with the best economists money can buy.  One the other side, you have … what, a bunch of politicans looking to profit from being in the opposition?  People who want Obama to fail?  This is not going to work for you.

Once you understand that these people, your subjects, don’t know what they’re talking about, it’s time to take on the administration.  Put together your team of reputable economists and present your own plan!  I’m sure you can find a group of economists who are not confident about the administration’s plan to sit around a table, put together a comprehensive theory of what is happening and how we can mitigate the crisis and then propose a solution that is different than what the administration has proposed.  The economists would probably do it for free just for the press!  Armed with a counter proposal,  your minions in government would be in a position to ask for changes in the stimulus package instead of futilely cursing the Democrats.  This is your chance to lead Rush.  What are you going to do with it?

It seems like a new Republican mantra has broken free from the dark corridors where is was previously consigned to furtive whispers: they want Obama to fail.  I understand that Obama is pushing for many policies that don’t fit with the Republican party line, but how can you want him to fail?  What does an Obama failure look like for the United States?  Unemployment over 10%?  Numerous failures in the US manufacturing sector?  Significant erosion in the soft power of the US, much of which stems from our economic position in the world?  Is that what Republicans are hoping for?  How can a Republican congressman go back to his or her constituents and defend this position?  The governor of South Carolina has gone so far as to say he wants to use S.C.’s share of the stimulus money to pay down South Carolina’s debts instead of trying to create new jobs.  Since South Carolina’s unemployment rate is 10.4%, the second highest in the nation, you might think that the governor would decide to create more jobs, but even as the state is furloughing teachers and moving to larger class sizes, Governor Stanford is turning away help for politics.

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Jim Bunning’s current status is: Self-destructive.

The suicide watch has been posted at Sen. Jim Bunning’s office.

Or, at least, it should be.  In the latest chapter of this increasingly bizarre saga, the Louisville Courier-Journal reports that Bunning (R-KY) told a closed fundraising meeting of his supporters that he would resign from office if he encountered opposition from the Republican Party to his reelection effort.

“I would get the last laugh. Don’t forget Kentucky has a Democrat governor,” one of the sources quoted Bunning as saying.

“The only logical extension of that comment is, ‘(Make me mad) … enough and I’ll resign, and then you’ve got 60 Democrats,’ ” said another source who was present at the event.

There's precedent for this sort of threat

Bunning’s official response was, predictably, a denial: “It’s not true. I intend to fulfill my obligation to the people of Kentucky. If you are going to write something like this, you better make your sources known, because they are lying.”  Of course, Bunning has a tendency to deny many of his kookier remarks until it is revealed that somebody had recorded them on tape, at which point Bunning’s memory becomes somewhat less fuzzy.

In terms of strategy, this amounts to saying: “don’t piss me off or I’ll kill myself.”  It seems pretty evident, therefore, that Bunning hasn’t thought his cunning plan all the way through.  As one source revealed to the Courier-Journal:

“It’s not because he’s old and senile — he’s always been like that. He’ll tell you what he thinks,” the source said.

But Bunning’s resistance to retirement is “sad to see,” the source said.

“The problem I see with all this media attention is, it just makes him more stubborn rather than make him ready to make a rational decision,” the source said.

Very astute source.

After President Obama’s address, the latest “rising star” of the Republican Party took the stage to present the party response.  Bobby Jindal’s speech has been pretty widely panned with pundits commenting unfavorably on his delivery, diction, stage presence, etc, but in terms of respresenting current Conservative thought, it was right on the money.  Skip all the window dressing and look at the meat of his address. Here is what I take away about Conservative views on government, taxes, education, science and defense.

Role of government

Governor Jindal starts with this story:

During Katrina, I visited Sheriff Harry Lee, a Democrat and a good friend of mine. When I walked into his makeshift office, I’d never seen him so angry. He was yelling into the phone: “Well, I’m the Sheriff and if you don’t like it you can come and arrest me!” I asked him: “Sheriff, what’s got you so mad?” He told me that he had put out a call for volunteers to come with their boats to rescue people who were trapped on their rooftops by the floodwaters. The boats were all lined up ready to go, when some bureaucrat showed up and told them they couldn’t go out on the water unless they had proof of insurance and registration. I told him, “Sheriff, that’s ridiculous.” And before I knew it, he was yelling into the phone: “Congressman Jindal is here, and he says you can come and arrest him too!” Harry just told the boaters to ignore the bureaucrats and go start rescuing people.

There is a lesson in this experience: The strength of America is not found in our government. It is found in the compassionate hearts and the enterprising spirit of our citizens.

The point here: Government is an obstacle to be overcome.  This particular story is pretty ironic.  My father was one of the late sheriff Lee’s deputies in the mid eighties and if there is one thing that is beyond doubt is that Lee was a politician through and through, the most influential politician in Jefferson Parish from the 80′s until his recent death.  Jindal praises Lee’s work organizing relief while at the same time implying that government is the problem.  The Governor envisions a world where the government is too small to help so that the “compassionate hearts and the enterprising spirit of our citizens” can shine through.

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In his career, Senator Jim Bunning (R-KY) has worn a variety of hats.  He started out as a major league baseball player, where he pitched for the Detroit Tigers and Philadelphia Phillies and was good enough to end up in the Hall of Fame.  He then went into politics in his home state of Kentucky, serving in the state legislature before being elected to congress and then, in 1998, winning a senate seat that he successfully defended in 2004.  And now, it appears, he’s a cancer specialist.

During a wide-ranging 30-minute speech on Saturday [Feb. 21] at the Hardin County Republican Party’s Lincoln Day Dinner, Bunning said he supports conservative judges “and that’s going to be in place very shortly because Ruth Bader Ginsburg … has cancer.”

“Bad cancer. The kind that you don’t get better from,” he told a crowd of about 100 at the old State Theater.

“Even though she was operated on, usually, nine months is the longest that anybody would live after (being diagnosed) with pancreatic cancer,” he said.

Bunning: "How many fingers am I holding up? Two? Two is correct."

Evidently, Bunning’s service in the senate alongside Bill Frist has given the Kentucky senator the same ability to make long-distance medical evaluations as Frist displayed during the Terri Schiavo affair.  Frist, it should be recalled, admitted that he had diagnosed Schiavo “based on a review of the video footage which I spent an hour or so looking at last night in my office.”  He concluded that Schiavo, despite her persistent vegetative state and extensive brain damage, “certainly seems to respond to visual stimuli.”

It’s not clear that the same can be said for Bunning.  Kentucky’s junior senator has been known to exhibit inexplicably bizarre behavior during his time in office.  In his 2004 reelection campaign, he said that his Democratic opponent, Dan Mongiardo, the son of Italian immigrants, “looked like one of Saddam Hussein’s sons.”  Bunning also confessed that he wasn’t much of a news junkie: “Let me explain something: I don’t watch the national news, and I don’t read the paper. I haven’t done that for the last six weeks. I watch Fox News to get my information.” That led to charges that Bunning was “out of touch,” which prompted a Nixonian denial: “That’s unfair. You know it is.  Of course I’m not out of touch.”  Note to aspiring politicians: when you have to assure voters that, really, you’re not all that out of touch, you’re doing something wrong.

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The term chutzpah – a Hebrew term for shameless audacity — is often defined by analogy: it’s like a man who murders his parents and then pleads for leniency because he’s an orphan.  Or it might be like a man who complains about the financial irresponsibility of average citizens while being cheered on by a bunch of derivatives traders.

Rick Santelli: "I'm the problem? No, YOU'RE the problem!"

That man was Rick Santelli, a financial affairs commentator for CNBC, member of the Chicago Board of Trade, and a former executive at Drexel Burnham Lambert, a firm driven into bankruptcy in the 1990s due to financially irresponsible trading in junk bonds.  Santelli, in what has become an anguished cri de cour for the conservative “what, me worry?” crowd, complained on a recent broadcast that the government stimulus package was “promoting bad behavior” by rewarding home buyers who can’t afford their mortgage payments (or, in Santelli’s words, the “losers”).  As Santelli put it:

You know, the new administration’s big on computers and technology– How about this, President and new administration? Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers’ mortgages; or would we like to at least buy cars and buy houses in foreclosure and give them to people that might have a chance to actually prosper down the road, and reward people that could carry the water instead of drink the water?

Again, let me point out: Santelli was saying this on the floor of the Chicago Board of Trade.  Certainly, it was possible for him to find a more ironic location from which to deliver this diatribe (one of the trading rooms at Bear Stearns comes to mind), but probably not one more convenient for his daily commute into the Loop.

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If President Obama’s campaign promises are worth going by, there is going to be a healthcare debate in the United States in the next couple of years.  Now’s the time to ask “who pays?”  The annual health care cost in the US passed the $2 trillion mark in 2006 and is rising at twice the cost of inflation.  If the government moves to a more universal health care system, won’t that move that cost onto the taxpayer?  The answer is that the citizens of the United States are already paying all the costs of our health care system.  Our employers, the primary sources of health insurance in the United States, pay third parties to pay for our health care, then immediately pass those costs along to their customers.  Every plane ticket you buy is paying for some healthcare.  That GM car?  Lots of health care built in there.  Banking services, ditto.  Taxes to state and local governments go to paying for health care for their employees.  Indigent care in hospital emergency rooms?  Paid for with tax dollars or higher fees for paying customers and that money comes from us.  WE ARE ALREADY PAYING THE ENTIRE COST OF OUR HEALTHCARE SYSTEM!

In some cases, those costs are killing off American businesses.  GM doesn’t need help because they don’t make good cars.  OK, the Japanese have a quality advantage, but the reality is that Detroit has caught up a lot over the last two decades and US cars have been climbing in the quality rankings for over a decade.  GM is saddled with $2,000 per car in costs for retired employees that their competitors don’t have to pay, and lot of that is healthcare.  Not only do we pay for that cost when we buy a car, we pay again in lost jobs, lower salaries and bailout money.  It’s like paying your mortgage a little several times a day instead of once a month.  It doesn’t make it cost any less.  It probably drives up expenses.  But it hides the cost.  You may feel better about it, but it still means that at the end of the month you are wondering where your money went.

Let’s put aside all the political debate and just look at costs.  It’s cheaper to treat a cavity at the dentist office than it is to treat an abscess in the emergency room.  Cheaper to pay for pre-natal care than a problem delivery.  Cheaper to pay for a flu vaccine than treat the flu.  A single payer system is a more cost effective way to deliver healthcare in this country and it doesn’t cost the taxpayer a single dime more.  We’re paying it already.

“For the first time in its history, every member of the United States Supreme Court is a former federal appeals court judge. Chief Justice John G. Roberts, Jr., in a lively and surprising talk a couple of weeks ago, said that development might be a good thing.”  So writes Adam Liptak, the supreme court correspondent of the New York Times.

"They laugh alike, they walk alike, at times they even talk alike ..."

It’s not clear why this is such a good thing, although I suppose homogeneity becomes much more attractive when everyone looks a lot like you.  It is unlikely that the composition of the high court has ever been so uniform as it is today.  Not only are all nine justices former federal appellate court judges, four of them served on the same circuit bench.  Indeed, only Anthony Kennedy and John Paul Stevens served in federal courts outside of the Washington-Philadelphia-New York triangle.  Granted, with the addition of a woman and a black man, the court’s group photo no longer looks exactly like the fortieth reunion of a Princeton eating club, but it could be a class reunion photo for Harvard Law School — after all, five of the justices graduated from there.

This is a far cry from the days when there was, unofficially, a “New York seat” or a “southern seat” or a “New England seat” or even a “Jewish seat” on the supreme court (there’s still a “Catholic seat,” to be sure, but it’s currently being occupied by five of the nine justices).  More disturbing, none of the justices has ever served as a trial court judge, despite the fact that the supreme court routinely reviews the performance of those judges and determines whether they made the right decisions — decisions that the justices themselves have never had to make.  It’s rather like having a sport where none of the referees has actually played the game.

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A Redditor started a Wiki on the stimulus bill. The purpose: to translate its provisions into ordinary language so regular people can understand it, filtering out the legalese. And to sort out exactly how much money is assigned to what and whom.

The initiative got some 870 up votes (and lots of discussion) on Reddit, and it seems like a fair spread of people is now working on the Wiki. I thought it was interesting: both the idea and the resonance it had. Citizenship in action?

Of course, as with every Wiki, the risk of pranks and manipulation looms rather large. But at least, as one commenter notes, it seems like an interesting social experiment. And even just the act of creating it should acquaint a bunch of people with the specifics of the bill, maybe better than many of the Congressmen who had to vote on it hours after the final version was released.

It’s also distinct from a partisan initiative like readthestimulus.org (offline right now), which was sponsored by the Heritage Foundation.

No idea how useful or complete it will become. For one, while the site links to the post-conference version of the bill, it also notes that it is still largely based on the version that was passed by the House on 28 January. Whereas the bill was of course significantly modified since – first by the Senate, which made changes that according to Krugman would have created 600,000 jobs less than the original House bill, and then by the conference, which crafted a compromise between the two bills.

I’d also worry about reinventing the wheel. For example, as noted in the Reddit thread, the CBO already created a table, stretching for a few pages, that summarises the stimulus expenses, year by year, by section of the bill. (Table 2 in the enclosures of this letter from the CBO director to Nancy Pelosi.)

But still I thought it was great. At best it will make for a very neat tool, and at worst it will still, as initiative, be an encouraging sign of the times.

TNR The Plank commenter WoodyBombay on Judd Gregg’s withdrawal of his nomination for the Commerce Secretary post (the timing of which led at least some to suspect bad faith):

Many of the Americans among you, I suspect, will have heard of the telling incident this week in which Fox News aired a news item on the stimulus bill which repeated, word for word, the points in a press release from the Senate Republicans. Without ever mentioning that the analysis they were presenting came straight from Republican officials, of course. “It was so blatant,” Steve Benen notes, “Fox News’ on-screen graphic included the identical typo made in the original GOP document, making it obvious that the network used a party press release as a news script”.

But bias isn’t usually as jaw-droppingly stupid or outrageous. Subtle still isn’t quite the right word, but try this on: Some Critics Blame Emanuel for Obama’s Cabinet Troubles. I clicked the headline because, well, I don’t like Emanuel, so I’m in principle well-disposed to believing the diagnosis, even if it does come from Fox. (The HuPo, for example – admittedly not the most reliable source either – last week had a disturbing take on the stimulus negotiations, which alleged that Rahm had undermined Congressional Democrats and Nancy Pelosi in order to curry favour from moderate Republicans and deflect criticism of Obama.)

Alas. The Fox headline referred “some critics”. The opening sentence read, “President Obama’s latest Cabinet setback [..] has put the White House on the defensive, particularly Chief of Staff Rahm Emanuel, whom some critics blame for cracks in the vetting process.” So what inside sources had Fox News found dishing the dirt on Rahmbo? Who was blaming Emanuel, and what did they have to share about his role in these vetting mess-ups?

Um, well … “some critics” turns out to refer to exactly one person. And that person turns out to be “Kurt Bardella, a spokesman for Rep. Darrell Issa, R-Calif.” That’s it. The only person they got to blame Rahm was the spokesperson to a lowly Republican Congressman, who himself is a bit of a crackpot.

The whole story, in fact, quotes just two sources. One is, unsurprisingly, Democratic consultant Doug Schoen, the kind of Democrat Republicans love; but even he refused to play ball, saying that “it’s hard to defend or attack Emanuel without knowing how involved he’s been in the vetting process,” and that it “doesn’t strike me as fair or appropriate [..] to put it all on Rahm”. The other’s Bardella.

He gets no less than six paras, though.