Employee compensation is a cost of doing business. It is not paid out of earnings. Its what we call in the business world an “above the line” expense. Therefore if the government wants AIG to renege on its employee contracts by cutting their employees pay, perhaps they should also scream about office lease expenses, utility bills, information costs, computing expense, etc. etc. Either they are going to bail them out from their faulty business model, or they are going to let them go bankrupt. But if AIG needs to pay key employees an amount deemed outrageous by B.O. and company, well then, that should have been a determinant before they decided to bail out the firm.
Posts For: March 16, 2009
In another installation of the ongoing comedy series “Tapper vs. Gibbs,” Jake Tapper utterly befuddles the White House press secretary on a key point: why didn’t the administration think of this bonus problem before they gave AIG the last $30B? There are two possible answers. First, Tim Geithner messed up. Or, second, there is no conceivable way of depriving employees of contractual bonuses. If the first is correct, then we have yet another reason to dump Geithner. If the second is the case, then the current round of angry recriminations is — shockingly — disingenuous. I think I’m voting for the first. After all, did Geithner tell AIG to go back and renegotiate bonuses before receiving the money? For the answer, stay tuned to tomorrow’s episode of “Tapper vs. Gibbs.”
UPDATE: Further support for the first theory comes from Mitt Romney. Didn’t they ask the employees to forgo the bonuses? And you don’t even have to wait for tomorrow for the next moment of comedy gold.
Here’s where the mainstream media’s Obamamania goes from the merely embarrassing to the downright cringe-inducing: New York magazine this week turns its worshipful eye on the First Lady, with a cover proclaiming “The Power of Michelle Obama” and a roster of no fewer than 16 writers laboring to elevate her to the iconic status already bestowed on her husband.
By far the most sophomoric offering comes from Stacy Schiff, who delves into the “sexual politics” of the first couple. But as one has come to expect from that nebulous early ‘70s terminology, the reader is treated to a pastiche of feminist posturing, an ultimately meaningless pop-culture reference or two, and a generational triumphalism that is as grating as it is historically false.
Get a load of this paragraph:
The girl is spicy and newfangled. She’s ushering us around a social corner as much as a political one. Professional rivals, Rock and Doris leaped out of bed in those pj’s the year Obama was born; only now are we discovering what a functioning marriage between equals actually looks like. …After decades of fake financials and fictitious balance sheets, WMDs that weren’t there and detention centers that were, our new First Lady is the genuine article. She has a real body — arms! Legs! Curves! And she has a real marriage.
So, according to Schiff, “only now” — decades after the novelty of late-60′s Women’s Lib morphed into the mainstream feminism that conquered every nook and cranny of American life — “are we discovering what a functioning marriage between equals actually looks like,” thanks, of course, to the transformative magic of the nation’s new First Couple.
Such a statement should be incomprehensible to anyone who lived through the past thirty years with any degree of sentience. Put aside the two-income families that have become the norm, the power couples, the “new man” paradigm of enlightened masculinity; even a look at the presidential couples of that period — most of whom were born and raised long before the advent of Betty Friedan, Gloria Steinem, and company — is enough to demonstrate the fatuousness of the argument.
It would no doubt come as a surprise to many former first ladies — from Betty Ford through Laura Bush — that their marriages were not “between equals.” All these women have been, in their individual ways, outspoken personalities.
But the kicker of course, is Schiff’s exultation that “our new First Lady is the genuine article. She has a real body — arms! Legs! Curves! And she has a real marriage.”
Funny, but I seem to recall that all the first ladies in my lifetime prior to Michelle Obama have been in possession of the full complement of limbs and parts that constitute the human form. And for all the talk during the Lewinsky scandal of an alleged propensity on the part of our presidents for extramarital dalliances, the fact is that most recent presidential marriages have been remarkably stable — “real,” if you will.
New York magazine notwithstanding, this, then, is the “power” of both Obamas — the power to take ostensibly intelligent writers and reduce them to producing the kind of incredulous, historically illiterate prose that on any other topic wouldn’t make it past the earliest stages of the editing process.
An opinion piece in the Washington Post offers a summation of the Iranian menace and a way forward for American diplomacy:
Since 1979, successive U.S. administrations have “engaged” the Iranian government in negotiations while maintaining a myth of no talks. All the while, Tehran has avoided any real change in behavior. It has amassed greater military might and regional influence, and escalated its repression of the Iranian people and its patronage of Lebanese Hezbollah and anti-Israeli, anti-American Islamist ideology throughout the Muslim world. And along the way, it has managed to convince some on the European and American left of its harmlessness, and even of “Islamic” progressiveness.
Negotiation with Iran can bear fruit if the regime is dealt with holistically. Pressing human rights would bring integrity to any talks and prevent Tehran from using negotiations to obfuscate and avoid real change, including on nuclear activity. The fall in the price of oil and Iran’s coming presidential election create openings for Obama to make strong demands on the nuclear issue as well as demands for verifiable political reforms.
So, what American imperialist is responsible for such a one-sided take on Iran and such a chauvinistic policy prescription?
Mariam Memarsadeghi is an adviser to democracy and human rights promotion programs in the Middle East. Akbar Atri served in the leadership of the Iranian student organization Tahkim Vahdat from 1997 to 2005. They were married in October.
Sure, they didn’t do a week-long press tour of Iran like Roger Cohen, but having actually fought the Khomeinist regime should count for something, right? Sadly, not with the Obama administration. While these two Iranian-born democracy activists write about what President Obama must “demand,” Obama himself is of the opinion that “all too often the United States starts by dictating” on issues in the Middle East. And Hillary Clinton, while in China, made it clear that human-rights issues must take a back seat to more pressing concerns.
Memarsadeghi and Atri conclude: “Iranians want to believe that the rhetoric of hope and change that marked Barack Obama’s campaign included them. He must not let them down in their struggle for freedom.” Unless Obama can fold it into an anti-Bush signing ceremony, hope and change for Iranian democrats will remain a dream for the foreseeable future.
The Employee Free Choice Act is causing Democrats grief in the Virginia gubernatorial race. It is no wonder that the Republican gubernatorial candidate Bob McDonnell is starting to make hay over card check. One reason: the “Northern Virginia technology community is in an uproar about it.” The Washington Post reports:
“The legislation would undermine efforts to attract businesses to Virginia, which is a right-to-work state,” Northern Virgina Technology Council’s] executive director, Bobbie Kilberg, said. “If card check passes, it will embolden unions to try to overturn right-to-work laws,” she said.
[. . .]
[M]any local tech employers point to problems that have come from union dominance in the auto, steel and textile industries, in which salaries have, in some cases, risen to unsustainable levels.”It starts a spiraling process — wages just gradually rise and then eventually you aren’t competitive anymore,” said Bradford Schwartz, chief executive of Blue Canopy, a Reston-based IT consulting firm. ”Given the current economic climate, this could be the worst thing that could happen.”
(What do Virginia’s two U.S. Senators think the reaction will be if they vote for the bill?)
The Democratic gubernatorial contenders understandably have been trying to hide from this problem. One Democratic candidate, Brian Moran, lamely tried to duck the issue in a recent conference call:
Moran sidestepped a question about the federal employee free choice — or card check — legislation. Last week, Republican Bob McDonnell said he is against the plan which he said could undermine Virginia’s right to work laws. Moran said he supports the state’s right-to-work laws and unions, but he wouldn’t stake out a position on the federal plan. ‘It’s a federal issue, Moran said. “I do not know how it would impact Virginia.”
Well, maybe he should consult those high-tech employers. They can explain it to him.
The latest poll from ABC News, the BBC and NHK of Iraqi opinion is out, and as might be expected it contains good news. The poll summary notes:
Eighty-four percent of Iraqis now rate security in their own area positively, nearly double its August 2007 level. Seventy-eight percent say their protection from crime is good, more than double its low. Three-quarters say they can go where they want safely — triple what it’s been.
The summary also notes:
Few credit the United States, still widely unpopular given the post-invasion violence, and eight in 10 favor its withdrawal on schedule by 2011 – or sooner. But at the same time a new high, 64 percent of Iraqis, now call democracy their preferred form of government.
Overall, I’d say this is excellent news, confirming that Iraq is headed in the right direction, notwithstanding some recent high-profile attacks. That doesn’t mean, however, that the momentum is irreversible. President Obama is to be commended for delaying major troop reductions until next year, following the national elections scheduled for December of this year, and for signaling that he would be willing to keep 50,000 U.S. troops (billed as advisers) into 2011. American forces still play a vital role in stabilizing Iraq as it emerges from the throes of civil war, and I would feel a lot better about Iraq’s long-term future if I knew that some U.S. troops could remain in a peacekeeping capacity (as in Bosnia or Kosovo) even beyond 2011.
Greg Sargent writes about the latest bad news for the supporters of the inaptly named Employee Free Choice Act (EFCA):
Specter has now weighed in on the issue in a way that may give some labor folks pause. The Senator told the Pittsburgh Post-Gazette that he is “well aware of the tradition of secret ballot on political elections and the difficulties of binding arbitration on the conducting of a business so I’m hearing people on all sides.”
This is potentially problematic for the pro-EFCA side. That’s because Specter seems to be treating somewhat seriously the anti-EFCA camp’s claim that the measure is undemocratic because of the secret ballot provision. This, despite the fact that the measure doesn’t forbid a secret ballot. Rather, it allows workers who want to join a union to choose not to hold one and to join based on a majority signing cards declaring their preference.
Sargent, like many other reporters who accept the Big Labor spin, has it wrong. Under the EFCA, if the union gets more than 50% of the authorization cards there is no election. And if the number of cards is between 30% and 50% of the applicable bargaining unit, the “option” of the election belongs to the union; not the employees.
As for Specter, he appears not to be buying what Big Labor is selling. Contrary to pro-Big Labor bloggers, the quid pro quo overtures of the AFL-CIO and SEIU, seem to have done their cause no good. Indeed, it is noteworthy that the weekend after these “offers” were made, Specter felt compelled to publicly express his reservations. (And he’s not accepting invitations to switch parties either.)
Regardless of the merits of EFCA, Specter can hardly be seen as responsive to such brazen maneuvers to secure his vote. After all, such a thing is simply not done under Scottish Law.
I’ve been traveling and am just getting caught up on the latest developments in the flame-out of Chas Freeman, and am particularly enjoying Walter Pincus’s latest piece. Someone nominate this guy for coming up with the biggest dog-bites-man story of the year.
Here’s the thing about stories on Arab reactions to Israel-related American political stories: there is almost never any doubt about what those Arab reactions are going to be. There are no “trends” here — there is utterly predictable, hackneyed conspiracy-theorizing about Jewish power and Israeli puppeteering. When has a story involving the U.S.-Israel relationship not been reported in Arab quarters as an example of Zionist manipulation?
Trend stories, or any story documenting the reactions to an event of one discreet group, are to be avoided by discerning readers because they are one of the best ways for a reporter to conceal his political opinions with a patina of journalistic credibility. (Here’s the obverse story the Post could have run: “‘Israel Lobby’ Conspiracy Theory Increasingly Popular on Political Fringes, in Middle East.”) But there is something particularly rich about the example Pincus has set. Why is the Washington Post running stories about Arab reports on Washington, instead of, you know, reporting about Washington itself? The Beirut Daily Star — a fine paper, only insofar as it publishes Michael Young’s columns — does not have a Washington bureau, and assigned no one to actually report out the reasons for Freeman’s downfall. Why, then, is there any news value to the Daily Star‘s interpretation of these events?
I’m actually giving Pincus too much credit. The report he cites from the Daily Star as evidence of the Lebanese analysis of Freeman is not actually written by anyone at the Daily Star. It is a reprint from an Inter Press Service analysis (IPS is a left-wing nonprofit journalistic collective) written from Washington, by two neocon-hunters named Jim Lobe and Daniel Luban.
So here’s the actual Walter Pincus story: a pair of Washington, D.C. writers prepare an updated version of the same conspiracy analysis they’ve been writing for several years, which is reprinted in a Lebanese paper, which in turn is quoted in the Washington Post as an example of what the Arab world is thinking.
Around the merry-go-round of journalistic hackery we go.
UPDATE: More hilarity. Philip Weiss writes a cover story for the un-American, un-conservative magazine called The American Conservative, and in it he quotes Pincus’ source for his “Arab” analysis of the Freeman debacle — the IPS’ Jim Lobe. Here is Lobe opining to Weiss about Freeman:
“I can tell you from personal experience that he is absolutely brilliant and incredibly well-rounded in his knowledge.”
Politicians of both parties are shrieking about AIG’s bonuses. The government can’t do much about it because, of course, these are contractual obligations. (AIG could and should have gone to executives to renegotiate those contracts, but they couldn’t unilaterally void the bonuses either.) But wait. This is precisely what flows from avoiding the bankruptcy courts. That is the legally proper and very efficient forum in which to void contracts, reduce liabilities, and throw out the otherwise entrenched and obviously defective management.
But in our bailout frenzy we are insisting that companies not utilize that time-honored mechanism. Instead we have contractual obligations we don’t like, dense management, and taxpayer-sponsored inanity. It is the very worst of capitalism, in which bad behavior is not eliminated but subsidized by the government. As a conservative friend remarks, “This is incompetent crony capitalism.” It’s enough to make us all rabid populists.
So the next time Barney Frank or Larry Summers cry foul, the question should be: Why didn’t the government send them to the bankruptcy courts? And better yet: Why is it still giving AIG and many similar firms billions of taxpayer money?
Was President Obama banking on non-existent European support to make his Guantanamo closing viable? Here’s the New York Times:
European countries that have offered to help the Obama administration close the detention center at Guantánamo Bay, Cuba, have begun raising questions about the security risks and requirements if they accept prisoners described by the Bush administration as “the worst of the worst,” according to diplomats and other officials.
Germany’s interior minister, Wolfgang Schäuble, has suggested publicly that if Guantánamo detainees pose no security risk, there is no reason the United States should not take them.
“No reason”? Why so rational? Hasn’t Herr Schäuble heard about the global appeal of America’s new superstar president? Does the Obama administration actually have to start giving reasons for things all of the sudden? If it does, let’s go one step back and ask why the United States should close Guantánamo at all.
Oh, that’s right, because we’re in the land of the dummy “Restart” button, where gesture trumps reality, where a signing ceremony is more important than the ramifications of what’s being signed, where renouncing Wall Street bonuses is more important than getting Wall Streeters to spend and stimulate the economy, where the significance of tearing down a Bush-era institution outweighs the potential dangers of freed terrorists, and where praise from European leaders is set above the actual cooperation of European governments.
Just when we thought “limited government” was one of those failed ideas and losing political catch phrases, there seems to be a lot of talk about whether it really is wise to radically expand the size and scope of government. There is nothing like an extreme pro-statist administration to get politicians of both parties (as well as some pundits) ruminating about just how much government can take on.
It’s not just Republicans in Congress who are raising concerns. This news report explains:
Government spending on most domestic programs is growing at its fastest pace in nearly 30 years, and a lot of worried Democrats are seeking ways to rewrite and reduce the size of President Barack Obama’s budget proposals.
Republicans are more blunt, but their message and that of the Blue Dogs is surprisingly similar: stop spending so much! Sen. Kent Conrad sounds indistinguishable from Judd Gregg or John Boehner when he says: “When I look at this budget, I see the debt doubling again, and that gives me great concern.”
And the same concern is raised from a different angle as observers begin to ask whether Obama appointees are stretched too thin. Realistically, if the administration had twice as many confirmed appointees the problem would be the same since they are “crafting sweeping changes to the country’s energy sector, education and health-care systems, and tax policies.” Yes, it takes a lot of people to reinvent the entire society. And it is very hard to manage.
The limited government argument never gets very far when discussed in a vacuum. And certainly government has steadily grown in size over the last few decades. But if the question is “Do you want a more limited government than the one Obama is proposing?” then the consensus appears to be “yes.” That explains why the president must conceal his intentions behind absurd pronouncements, such as supposedly not caring for big government and not wanting to spend all that money.
On that issue he’s brought a lot of Americans together. More Americans every day are discovering that bigger and bigger government and greater spending may not be the right way to go.
Last week Charles Murray received the American Enterprise Institute’s highest honor, the Irving Kristol Award, and delivered a lecture, ”The Happiness of the People,” a title taken from James Madison’s phrase in The Federalist Paper #62. Murray’s lecture began with his assertion that President Obama and his leading intellectual heroes are the American equivalents of Europe’s social democrats. According to Murray, the European model is fundamentally flawed because it is not suited to the way human beings flourish. The goal of social policy should be to ensure that the institutions of family, community, vocation, and faith are robust and vital; the European model, Murray argues, enfeebles every single one of these institutions.
Beyond that, Europe has become a continent that no longer celebrates greatness. While some worry the European model will be embraced here in America, Murray argues there is reason for strategic optimism, based on discoveries in neuroscience and genetics. According to Murray, these discoveries undermine two premises about human beings that are at the heart of the social democratic agenda: “the equality premise” (in a fair society, different groups of people will naturally have the same distributions of outcomes in life, and when that doesn’t happen, it is because of bad human behavior and an unfair society) and “the New Man premise” (human beings are malleable through the right government policies).
Murray concludes his lecture with a reflection on American exceptionalism, and he argues,
it isn’t something in the water that has made us that way. It comes from the cultural capital generated by the system that the Founders laid down, a system that says people must be free to live life as they see fit and to be responsible for the consequences of their actions; that it is not the government’s job to protect people from themselves; that it is not the government’s job to stage-manage how people interact with each other. Discard the system that created the cultural capital, and the qualities we love about Americans can go away. In some circles, they are going away… The drift toward the European model can be slowed by piecemeal victories on specific items of legislation, but only slowed. It is going to be stopped only when we are all talking again about why America is exceptional, and why it is so important that America remain exceptional. That requires once again seeing the American project for what it is: a different way for people to live together, unique among the nations of the earth, and immeasurably precious.
This lecture is a reminder that Charles Murray is among the most impressive and important public intellectuals of the last several decades. More than any other single person, he changed how we think about welfare, thanks to his 1984 book Losing Ground (which was, along with Allan Bloom’s The Closing of the American Mind and Richard John Neuhaus’s The Naked Public Square, one of the three most important conservative books of the 1980s).
The range and quality of Murray’s work, the clarity of his language and the intellectual force of his arguments, are remarkable. I say that as someone whose views aren’t always coincident with Murray’s (I have more confidence in the capacity of government policy to alter human behavior for the good than he does; I have less confidence that 21st century science will play a dispositive role in undermining the premises of social democrats than he does; and we place different weight on the bearing that “nature” v. “nurture” has on educational achievement and on other matters). What is perhaps most striking about Murray, though, is that he is animated by a humane vision of society and how to advance the human good. He is (to use a term he would balk at) a compassionate conservative. He is also a man of personal integrity and delightful, vivifying company. Several years ago, Charles Murray wrote a book about human excellence; for those of us who have had the pleasure and privilege to read him and get to know him over the years, he is a man who embodies it. The honor he received last week was well earned.
A colleague asked if I could discern what the latest Obama administration message on the economy was. I confess I am stumped. The Fed Chairman goes on TV to show his “human side.” The president and one of his economic advisors are now, with a bit of hemming and hawing, declaring the fundamentals of the economy to be “sound.” And Obama is now activating his campaign followers to support his $3.6B budget plan.
So what happened to the “catastrophe”? And more importantly, where is the bank plan? No one really can say.
This all has the air of extreme improvisation and political opportunism. The economy had to be on the brink of collapse to get the stimulus plan through so that was the rhetoric then. Now, pundits and politicians are complaining the economy is too fragile to try to ram through the liberal wish list, so the economy is “better than you think.” Which is it?
One suspects the economic “analysis” has everything to do with the political agenda and not much to do with the real state of the economy. And if unemployment increases, what then? I suspect we will suddenly face “catastrophe” again — just in time for another stimulus plan. At some point the voters, not to mention investors and employers, might come to suspect this is all political spin cooked up by an administration that doesn’t really know what to do about the economy.
Via Darleen Click of Protein Wisdom comes this story from England’s universal healthcare system: Young women under the age of 25 are not only denied pap smears that could detect potentially lethal cancers, but also not allowed them under any circumstances — even if they pay for them themselves.
This is the logical consequence of universal health coverage. All are equal. No one need fear someone else getting treated better because of their socioeconomic status or ability to pay. All shall be entitled to the same treatment, based on nondiscriminatory criteria.
Criteria such as signs that a woman just might develop cervical cancer before the age of 25. Statistics show that the vast majority of women under 25 don’t need tests for that disease, so they simply aren’t allowed. Not even if the woman is willing to pay for her own peace of mind, and her doctor agrees that it would be a good idea. No, such tests would be redundant — just like that very small number of women whose lives might be saved by earlier testing.
No, the American health care coverage system isn’t perfect. But as flawed as it is, it’s still a lot better than the alternatives being cited as role models.
Sen. Mitch McConnell dissects the Gray Lady’s shifting views on judicial appointments, which curiously turn depending upon the party occupying the White House.
Are we in the worst economy since the Great Depression? Not even close to that – or the 1982 recession.
The New York Times reports: “The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama’s agenda.” Hmm. You might even see people start organizing tea parties around the country to halt bailout mania.
AP reports: “One of President Barack Obama’s economic advisers said Sunday that the economy is fundamentally sound, a striking reversal from the Democrat’s campaign rhetoric as his administration now guides the nation’s financial health amid dire conditions.” Well, then we can forgo the New Deal II, right?
If AIG’s conduct is so “outrageous,” why does Obama keep giving it money? Sounds like corporate welfare of the worst type.
Christiana Romer tries to excuse Obama’s McCain-sounding rhetoric. Not very successful, but she seems like a very sincere lady. Someone should ask her some hard questions. (e.g. What is a “saved” job? If card check increases unionization and boosts wages won’t unemployment increase?)
The Norm Coleman camp seems enamored of this editorial, declaring we’ll never know who won the Minnesota Senate race and we should have a do-over. Frankly, if the former is true, that is largely the result of utterly inept post-election lawyering by the Coleman legal team. And a do-over is not, I think, either politically viable or legally probable. Moreover, we are going to have a winner, and in a democracy we generally don’t benefit by attempts to delegitimize the winner.
Michael Goodwin hits the nail on the head: “Yes, it’s early, but an eerily familiar feeling is spreading across party lines and seeping into the national conversation. It’s a nagging doubt about the competency of the White House.” And it’s not just Tim Geithner : “[T]hey were reinforced by the bizarre nomination and withdrawal of Chas Freeman as a top intelligence official. It’s hard to know which explanation is worse: that the White House didn’t know of Freeman’s intemperate criticism of Israel and his praise of China’s massacre at Tiananmen Square, or that it didn’t care. Good riddance to him. But what of those who picked him?”
Big Labor claims card check is designed to re-level the playing field and prevent employers from unfairly stopping employees from unionizing. The reality is different, the Wall Street Journal editors argue: “Union rolls hit a peak of 32.5% of the labor force in 1952, then fell fast. As of last year, 12.4% of American workers belonged to a union. The share of unionized government employees has held steady for decades, but a mere 7.6% of the private workforce chooses to join a union. Unable to reverse the trend in the marketplace, unions have focused on electing Democrats who will rewrite national labor law.”
The Washington Post editors don’t seem sold on Terry McAuliffe as the Democratic gubernatorial nominee in Virginia: “He must convince Virginians that a businessman with exactly zero years’ experience in Richmond can navigate the stratified General Assembly, solve transportation gridlock and generate jobs. It’s possible to imagine Mr. McAuliffe persuading businesses to locate in the state or lawmakers to support his legislation. But he must prove that he can also handle the day-to-day challenges of the job.”