Saturday, March 21, 2009

A Presidential Wake-Up Call

from Newsweek
By Eleanor Clift
March 21, 2009

The AIG mess should be a warning to Obama that even popular presidents can squander good will.

Who would have thought 55 days into this administration we would be asking the question, what did he know and when did he know it? Word that a provision in the stimulus bill gave the green light for AIG to hand out bonuses using taxpayer money sent the media bloodhounds hot on the trail of whoever is the culprit. For a time, it looked like Senate Banking chairman Chris Dodd would take the fall, but after 24 hours of twisting in the wind, Dodd said the change that exempted past agreements to pay bonuses was made at the request of the administration.

President Obama likes to remind voters that he inherited a mess, and that's true, but this one is of his own making. And until he comes up with a satisfactory explanation of who did what, when, and why, his credibility will suffer. Forty-eight hours ago, I didn't think Treasury Secretary Tim Geithner was in trouble, but if the transaction with Dodd turns out to have Geithner's fingerprints on it, his job could be in jeopardy. The deadly chain of events may have started innocently enough, with Treasury Department lawyers raising questions about the government retroactively curtailing private-sector contracts, but did Dodd, who authored the restrictive language, capitulate to some Treasury flunky, or did someone more senior lean on him?
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