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?

— Crossposted from Cogitamus —
It’s March 15, a national holiday, and police was duly out in massive numbers to guard the some twenty different, mostly oppositional, manifestations that took place. March 15, on which Hungarians commemorate the 1848 uprising against their Habsburgian overlords, is one of the two or three most volatile days in this country. There’s always a great number of protest manifestations (especially if there is a leftwing government), and the last couple of years there was widespread rioting.

Which is why today was a bit of a disappointment, really.

I was sort of ready to ignore the festivities already, since after two and a half years and a dozen iterations, the demo-cum-riot scene has jumped the shark. It’s always the same anyway: angry grannies and families with Hungarian flags in the afternoon, hooded and balaclavad youths in the evening, when the mainstream conservative politicians sternly intoning their dire warnings make way for younger rabble-rousers, who shout about PM Gyurcsany, the commies, the police and the Jews. Demonstrators who look like the kind of mix of students and squatters you’d get in a far-left demo in Western Europe. Much posturing, waiting around, exchanging of tall tales, waving flags and shouting slogans; not to mention trying to impress the far-right girls, who are surprisingly cute. Marching this way and that, avoiding the police, building barricades, and then the inevitable show-down; teargas, batons, the crowd tearing back with scarves over their mouths. A lengthy cat-and-mouse game, as the rioters taunt the cops and pelt them with stones, until the dull thuds of tear gas grenades being shot into the crowd set everyone running again. Only for the game to start over twenty minutes later once the dust is settled. Rinse and repeat.

Nevertheless, I did keep an eye on the website of the Magyar Nemzet, a national-conservative newspaper which at every new iteration publishes a breathless minute-by-minute account of goings-on in the city. Very practical if you want to know where the riots are at any given moment. Not saying they actively incite the rioters, but … OK, who am I kidding, they do.

But it was thin gruel today. No large street battles, no kidnapped tank being driven around by demonstrators. A year ago, and two years ago, rioters would control sections of major thoroughfares downtown a mile long, rocks would rain down on the police shields. Barricades would be built, phonebooths felled and used as material, Molotov cocktails hurled. This time there was basically one violent clash of sorts, in the late afternoon near the Saint Stephen’s Basilica, around the corner from my work. Which was quickly smothered by an overwhelming police presence, with the riot cops easily outnumbering the rioters. (They’ve been recruiting).
By the time I bothered to haul myself over to the area, it was kind of sad really. Clumps of protestors, hanging around in small groups. Barely a flag among them, though there was a guy or two in a Hungarian Guard uniform. No chants of “Gyurcsany, bugger off”. Just waiting, cracking the odd joke but generally sharing a desultory mood. Warily watching the columns of riot police, clad in black, that blocked off the sidestreets. Sometimes a unit, upon barked commands, rattled off in a lockstep run, or moved into place. The whole street lined with police cars, vans, a whole bus arriving with fresh manpower.

Some grannies, the national tricolor pinned on their chest, heckled the cops; a drunk in camouflage slurred insults. We pay you, our taxes, now look at you. But mostly, the status quo was complete. A far right teen, in the practical combat-ready outfit of boots, thigh-highs and skirt, posing for the photo with her girl friend; a guy in near-folkloric nationalist outfit jollying around in mock-poses when I turn my camera his way. On the other side, the helmeted cops are painstakingly polite to anyone with a camera or otherwise visibly not part of the scene. Hard to imagine these were the troops who two years ago were condemned by Amnesty International for violent abuse of demonstrators they had carted off in their vans: they allegedly handcuffed and lined up rows of suspects on their knees, and beat them with truncheons. Though they do still look the part, and at one point wrestled someone from the crowd and violently pushed and shoved him into one of the waiting vans.

Generally though, the police seem to have learnt a lot, these past two years. In the first round of rioting, when protestors briefly occupied the building of Hungarian Television, more cops were injured than protestors. Night after night, they were hunting after bands of rioters running amock, unable to do more than chase them off to ever new places. Now, they seem in full control. What are they doing differently now? Lesson one: overwhelming numbers. Have a disproportionate presence vis-a-vis the rioters. Outnumber them in such proportions, they’re intimidated before they even start. Lesson two: preempt their moves. Smother even the slightest rioting before it escalates. Block off entire neighbourhoods if need be. Lesson three, and this may seem paradoxical: mingle. Well, mingle is perhaps not the right word. But again and again, a point arrived where a phalanx of riot cops crossed the street or jumped out of a bus — not, in old school style, to form a big line of shields and then push the protesting youths into a pack and then backward — but to mix into the crowd. With one cop for every protestor, noone even thinks of resistance as the cops scatter and demand ID from every youth, and frisk many of them.

Of course that’s only possible thanks to their force of numbers. And how this fits with your various civil rights, I don’t know. I’ve never been asked to ID myself just for gathering in protest when taking part in demonstrations back home – and that’s all these kids were doing, by the time I arrived.

Hear me, I’m defending fascists now. And there is genuine reason to worry about the flourishing far right movements, with the Hungarian Guard ceremonially inducting 650 new members today. Just two days ago, a right wing group called the Hungarian Arrows Liberation Army (named in reference to the WW2-era Arrow Cross regime) claimed responsibility for a bus explosion in Bács county. The group said it had wanted to punish a local coach company that had transported a group of Roma “marching against Hungarians” to a demonstration in Ózd, in order to “avenge the anti-Hungarian sentiment”. In all, four people have been killed in seven recent attacks against Roma.

The silent majority, meanwhile, is just disgusted with it all. A Eurobarometer poll published last month showed that just 16% of Hungarians trust their national government – compared to 45% who trusted local and regional authorities and 51% who trusted the EU. More damningly, a national pollconducted last month showed that “all Hungary’s politicians [..] have negative ratings”. Neither the President, a conservative, nor the Prime Minister, a socialist (albeit, as is the case with many ex-communists in the region, one who has embraced the market reform with a passion), was evaluated positively. Nor was the Speaker of the Parliament – or any of the main opposition leaders.

Nor does it seem to be a particularly ideological matter. While the conservative opposition party Fidesz “towers above all the other parties” in the poll, the least impopular politician is actually a Socialist. Moreover, it’s Katalin Szili, the parliamentary speaker who often criticizes PM Gyurscany … from the left. So the Hungarians don’t agree whether the answer lies to the left or to the right, they just know they’re fed up with what they have now. Which neatly summarises the political history of postcommunist Hungary, come to think of it.

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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Today, the Supreme Court issued a ruling that the Wyeth pharmaceutical company is liable for injuries sustained to a patient when a drug was improperly administered despite a warning explicitly called out on the label.  It wasn’t even a close vote (6-3) nor was it a new drug.  Here are the details per the NY Times.  The patient, Diana Levine, went to a clinic in 2000 with migraine pain for a shot of Demerol.  As part of this treatment, the clinic also prescribed Phenergan for nausea.  The Wyeth drug Phenergan has been in use since it was approved in 1955, but if misused, it has a horrendous side effect.  Contact with arterial blood can, according to the warning on the label, cause “gangrene requiring amputation”!  That is what happened in this case.  The clinic improperly administered the drug, accidently injecting it into an artery instead of the target vein and the patient eventually lost her arm.  So how is Wyeth liable?  If you have a drug on the market for half a century with 200 million successful uses and a warning on the label that details out the risk, what more must you do?  The Vermont jury that heard the case said that the label could have been more explicit or banned injection completely.  So I feel for Ms. Levine (who also settled a case for $700,000 against the clinic), but what is the responsibility of Wyeth here?  This is not a drug that you buy over the counter at Rite Aid.  You would only expect it to be used in a hospital or clinic setting and it would be administered (as it was in this case) by medical professionals.  Administering the drug by intermuscular injection or IV is supposed to be very safe.  The warning is spectacularly specific.

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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.

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.

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.

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.

(Yes, I know everyone else already tried out Obamacon.me a month or two ago…)

“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.

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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