Blaming Dodd for AIG-Gate Misses the Mark

By
Thursday, March 19, 2009 at 12:13 pm

There’s a new argument coursing through Washington in the last 48 hours, which lays the blame for the AIG bonus scandal at the feet of Sen. Christopher Dodd (D-Conn.) for altering his recently-enacted executive pay proposal to exclude AIG.

The blame is misplaced. Here’s why.

The Dodd executive pay amendment, which was attached to the $787 billion stimulus bill last month, prohibited top executives at bailed-out firms from receiving bonuses exceeding one-third of their salaries. The amendment, which was opposed by the Obama administration, passed the Senate by a voice vote on Feb. 12.

Afterwards, at the urging of the White House, Dodd agreed to add a clause ensuring that the restrictions wouldn’t apply to “any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009.” This is the language in the final bill signed by President Obama, and because AIG’s controversial bonuses are contractual, it’s also the reason that the insurance giant isn’t subject to the Dodd amendment’s limits. (As Daphne points out today, there are legal questions about whether Washington can meddle with those contracts in any event, but let’s assume for a moment that the original Dodd provision would have empowered Treasury to do so — if only because that’s what Dodd critics are doing this week.)

In a statement issued Tuesday, Dodd said that the language modifications were made “to ensure that some bonus restrictions would be included in the final stimulus bill.”

The implication was that if he didn’t agree to the compromise with the White House, the entire provision would have been stripped out. And there was good reason to fear that would have happened. Indeed, two other executive pay provisions that passed the Senate were deemed unacceptable to the Obama administration. One, sponsored by Sens. Ron Wyden (D-Ore.) and Olympia Snowe (R-Maine), would have forced TARP recipients to repay Washington for any 2008 bonuses exceeding $100,000 or pay a steep tax on the outstanding balance.

This week, Wyden went after the administration for rejecting the very measure that might have precluded the entire AIG scandal. From Politico:

“Sen. Snowe and I put a lot of hours into that effort. We had a bipartisan provision that in my view would have set up a huge disincentive for somebody paying out bonuses like was done in the AIG case,” Wyden said. “We both pushed very hard to persuade the Obama economic team to go along with our approach, and unfortunately we weren’t able to convince them.”

So for the administration’s industry-friendly stand on executive pay, Dodd is taking the heat.

Not that the Connecticut senator, who’s facing a tough reelection contest in 2010, didn’t invite some of the criticism. When TARP was passed last fall, for example, the Banking Committee chairman hailed the “very concrete” limits on executive pay, even as experts and some other Democrats were quick to point out gaping loopholes in the law. And his amendment, which restricts bonuses for only the top 25 executives of the largest bailed-out companies, wouldn’t have done much to rein in AIG, where 73 employees recently received bonuses in excess of $1 million.

Also, Dodd’s carefully worded statement Tuesday can be easily interpreted as an indication that he wasn’t a part of the negotiations that led to the changes to his amendment. “Because of negotiations with the Treasury Department and the bill Conferees,” the statement reads, “several modifications were made, including adding the exemption.” Dodd was not a conferee.

The passive voice strikes again.

In another statement issued late last night, Dodd clarifies that he was actively involved in the modification process, but he’s quick to say that he opposed the changes even as he agreed to make them.

I’m the one who has led the fight against excessive executive compensation, often over the objections of many. I did not want to make any changes to my original Senate-passed amendment but I did so at the request of Administration officials, who gave us no indication that this was in any way related to AIG.

As Harold Meyerson pointed out in his Washington Post op-ed Wednesday, it’s probably time to redirect the criticism toward Treasury Secretary Tim Geithner:

Geithner’s indulgence of bankers’ indulgences is fast becoming the Obama administration’s Achilles’ heel. The AIG debacle is the latest in a series of bewildering Geithner decisions that threaten to undermine the administration’s efforts to restart the economy. So long as it’s Be Kind to Bankers Week at Treasury — and we’ve had eight straight such weeks since the president was inaugurated — American banking, and the economy it is supposed to serve, will remain paralyzed. The Geithner plan to restart the banks provides huge taxpayer subsidies to hedge funds, investment banks and private equity companies to buy the banks’ toxic assets without really having to assume the risk. That’s right — the same Wall Street wizards who got us into this mess, using the same securitization techniques that built mountains of debt within a shadow financial system that remains unregulated, are the saviors whom Geithner has anointed to extricate us — with our capital, not theirs — from the mess that they created.

Comments

19 Comments

pj
Comment posted March 19, 2009 @ 10:11 am

Geithner's “This is shamefull. It is a disgrace”.


knowbuddhau
Comment posted March 19, 2009 @ 10:21 am

Well done! To me, this is the most exciting potential for blogging: busting myths even as propagandists deploy them.

Two things about your article, then I'll post my own thesis.

I like your emphasis on the power of the passive voice to conceal effective agency, to conceal whodunit when sh*t happens.

With the failure of our corporate media, I no longer read NYT or WaPo, esp. not the editorials. I don't know the reliable sources from the Pentagons Message Force Multipliers. So I thank you for citing Meyerson's op-ed, I would've missed it.

And now for something Completely Different. 14 years ago, my graduate studies in research psychology ended abruptly when I ran out the clock, having not obtained.

So now, I'm presenting this in the spirit of a phenomenological psychology research report. I've been developing this most recently in the comments of Glenn Greenwald's blog, Unclaimed Territory, on Salon.com, with my universal username, knowbuddhau2.

http://letters.salon.com/opinion/greenwald
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
THROWING DODD UNDER THE BUS

Is there a manual on this somewhere? Or do manipulators of public opinion, like artists of other types, simply work their magic intuitively?

The fact that Campbell lectured at State's Foreign Service Institute, followed by a dramatic change in our foreign affairs, which just so happens to express his themes masterfully, leads me to conclude: this is how we do it.

The history of my science, psychology, can't be told without its twin, “public relations.” I trust this community is sufficiently aware of that sordid tale for me not to repeat it.

This is what happens when we reduce being human to point instances– quantum singularities–of egocentric pain in a mechanical, lifeless, dare I say god-forsaken cosmos where kinetic power determines the order of our day.

The on-going effort, to reduce us to machines the better “to predict and control” (Our Motto) human behavior, by conceiving of psychology as being of the type of natural science modeled after physics, has been among the worst ideas ever. Sure, we've learned a lot. But at what cost, and who benefits?

One of the best things I've learned from that type of psychology is this: brains function on the basis of neuronal models of stimuli. Stimuli are re-presented to awareness by virtue of the activity in distributed networks of neurons: our internal theater of the mind is a sort of holographic projection of these networks.

Neuronal models of stimuli are the kenotic (self-emptying) vessels of mind, into which experience is pouring; from which awareness is arising like steam; and out of which we are flowing water. That is, they function just like these words are functioning right now.

Reductive Mechanism is a failed method for approaching psyches. And yet that's what we do, we FORCE people to do as we say, or we ratchet up the pain until they do. And then what? Are they supposed to disregard being machined to death, like Rachel Corrie, for example?

* [[[Full-Spectrum Dominance / Our Common Weal///[[[{{{Rachel Corrie}}}]]]]]]

Now the brackets are Caterpillar tractor treads.

* [[[Full-Spectrum Dominance / Our Common Weal///[[[{{{Chris Dodd}}}]]]]]]

This is an illustration of what we mean when we say, “The White House threw Dodd under the bus.”

In our world, god doesn't just come from a machine, god IS the machine! Listen to the way we talk about our military: as if it were the weather. We treat our military leaders like priests of the temple of almighty god.

Myth-jackers know this very well. By now, a thorough study has been made of American mythology, and how to leverage that powerful knowledge to their advantage.

It's our updated, upgraded, nuclear-powered Goering Method:

~~~~~~~~~~~~~~~
SEN. ROBERT BYRD: My hands tremble, but my heart still throbs. I read this quote: “Naturally, the common people don’t want war. But after all, it is the leaders of a country who determine the policy, and it is always a simple matter to drag the people along whether it is a democracy or a fascist dictatorship, or a parliament or a communist dictatorship. The people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country.” Hermann Goering, president of Reichstag, Nazi Parliament, 1934. http://www.democracynow.org/2008/3/25/body_of_w…
~~~~~~~~~~~~~~~~~~~~~~~~~

Dress it up in the right costumes on the right characters and Shazam! A skinny guy from Illinois now looks like a Messiah or Anti-Christ. That's how we power social engineering projects. Between those poles flows the power of myth.

Mechanists make the fundamental mistake of trying to use mechanical tools on a mythosociopsychical problem: Justice. You can't machine Justice. But that's what Rove tried to do with our Justice Department.

~~~~~~~~~~~~~~
Rove's Monday Whoppers

Scott Horton

http://www.harpers.org/archive/2008/02/hbc-9000…

He calls himself “Grendel,” “Moby Dick,” and “Lord Voldemort.” He is the man ever behind the scenes, manipulating and driving the events on the surface without being seen. His hand is behind the hiring and firing of U.S. attorneys and his manipulations were a conscious effort to put federal prosecutors to work for partisan political purposes.
~~~~~~~~~~~~~~~~~~~~~~~~~

Sadly, I see the Democratic Party doing the same thing, uses the power of myth to power weapons-grade domestic propaganda, only different.

Lao-Tzu said, “When the right Way is used by the Wrong-headed, the Way still works, now for the wrong reasons.”


Topics about Banking » Blaming Dodd for AIG-Gate Misses the Mark
Pingback posted March 19, 2009 @ 2:15 pm

[...] BNR Nieuwsradio – headlines added an interesting post on Blaming Dodd for AIG-Gate Misses the MarkHere’s a small excerptThere’s a new argument coursing through Washington in the last 48 hours, which lays the blame for the AIG bonus scandal at the feet of Sen. Christopher Dodd (D-Conn.) for altering his recently-enacted executive pay proposal to exclude AIG. The blame is misplaced. Here’s why. The Dodd executive… [...]


Posts about Politico as of March 19, 2009 » The Daily Parr
Pingback posted March 19, 2009 @ 4:40 pm

[...] the public face of the beleaguered party. However, the Politico’s Ben Smith disagrees Blaming Dodd for AIG-Gate Misses the Mark – washingtonindependent.com 03/19/2009 There’s a new argument coursing through Washington in the [...]


pj
Comment posted March 19, 2009 @ 5:11 pm

Geithner's “This is shamefull. It is a disgrace”.


knowbuddhau
Comment posted March 19, 2009 @ 5:21 pm

Well done! To me, this is the most exciting potential for blogging: busting myths even as propagandists deploy them.

Two things about your article, then I'll post my own thesis.

I like your emphasis on the power of the passive voice to conceal effective agency, to conceal whodunit when sh*t happens.

With the failure of our corporate media, I no longer read NYT or WaPo, esp. not the editorials. I don't know the reliable sources from the Pentagons Message Force Multipliers. So I thank you for citing Meyerson's op-ed, I would've missed it.

And now for something Completely Different. 14 years ago, my graduate studies in research psychology ended abruptly when I ran out the clock, having not obtained.

So now, I'm presenting this in the spirit of a phenomenological psychology research report. I've been developing this most recently in the comments of Glenn Greenwald's blog, Unclaimed Territory, on Salon.com, with my universal username, knowbuddhau2.

http://www.salon.com/opinion/greenwald/

(Use “Open in a New Tab” or the page will show up in this text box. Hit Backspace (on your keyboard or right-click Back). Never seen this feature in a comments section. BTW, LOVE this edit feature!)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
THROWING DODD UNDER THE BUS

Is there a manual on this somewhere? Or do manipulators of public opinion, like artists of other types, simply work their magic intuitively?

The fact that Campbell lectured at State's Foreign Service Institute, followed by a dramatic change in our foreign affairs, which just so happens to express his themes masterfully, leads me to conclude: this is how we do it.

The history of my science, psychology, can't be told without its twin, “public relations.” I trust this community is sufficiently aware of that sordid tale for me not to repeat it.

This is what happens when we reduce being human to point instances– quantum singularities–of egocentric pain in a mechanical, lifeless, dare I say god-forsaken cosmos where kinetic power determines the order of our day.

The on-going effort, to reduce us to machines the better “to predict and control” (Our Motto) human behavior, by conceiving of psychology as being of the type of natural science modeled after physics, has been among the worst ideas ever. Sure, we've learned a lot. But at what cost, and who benefits?

One of the best things I've learned from that type of psychology is this: brains function on the basis of neuronal models of stimuli. Stimuli are re-presented to awareness by virtue of the activity in distributed networks of neurons: our internal theater of the mind is a sort of holographic projection of these networks.

Neuronal models of stimuli are the kenotic (self-emptying) vessels of mind, into which experience is pouring; from which awareness is arising like steam; and out of which we are flowing water. That is, they function just like these words are functioning right now.

Reductive Mechanism is a failed method for approaching psyches. And yet that's what we do, we FORCE people to do as we say, or we ratchet up the pain until they do. And then what? Are they supposed to disregard being machined to death, like Rachel Corrie, for example?

* [[[Full-Spectrum Dominance / Our Common Weal///[[[{{{Rachel Corrie}}}]]]]]]

Now the brackets are Caterpillar tractor treads.

* [[[Full-Spectrum Dominance / Our Common Weal///[[[{{{Chris Dodd}}}]]]]]]

This is an illustration of what we mean when we say, “The White House threw Dodd under the bus.”

In our world, god doesn't just come from a machine, god IS the machine! Listen to the way we talk about our military: as if it were the weather. We treat our military leaders like priests of the temple of almighty kinetic (as compared with kenotic; BTW, my in-line dictionary recognizes the former power, but not the latter ;-] ) god.

Myth-jackers know this very well. By now, a thorough study has been made of American mythology, and how to leverage that powerful knowledge to their advantage.

It's our updated, upgraded, nuclear-powered Goering Method:

~~~~~~~~~~~~~~~
SEN. ROBERT BYRD: My hands tremble, but my heart still throbs. I read this quote: “Naturally, the common people don’t want war. But after all, it is the leaders of a country who determine the policy, and it is always a simple matter to drag the people along whether it is a democracy or a fascist dictatorship, or a parliament or a communist dictatorship. The people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in every country.” Hermann Goering, president of Reichstag, Nazi Parliament, 1934. http://www.democracynow.org/2008/3/25/body_of_w…
~~~~~~~~~~~~~~~~~~~~~~~~~

Dress it up in the right costumes on the right characters and Shazam! A skinny guy from Illinois now looks like a Messiah or Anti-Christ. That's how we power social engineering projects. Between those poles flows the power of myth.

Mechanists make the fundamental mistake of trying to use mechanical tools on a mythosociopsychical problem: Justice. You can't machine Justice. But that's what Rove tried to do with our Justice Department.

~~~~~~~~~~~~~~
Rove's Monday Whoppers

Scott Horton

http://www.harpers.org/archive/2008/02/hbc-9000…

He calls himself “Grendel,” “Moby Dick,” and “Lord Voldemort.” He is the man ever behind the scenes, manipulating and driving the events on the surface without being seen. His hand is behind the hiring and firing of U.S. attorneys and his manipulations were a conscious effort to put federal prosecutors to work for partisan political purposes.
~~~~~~~~~~~~~~~~~~~~~~~~~

Sadly, I see the Democratic Party doing the same thing, uses the power of myth to power weapons-grade domestic propaganda, only different.

Lao-Tzu said, “When the right Way is used by the Wrong-headed, the Way still works, now for the wrong reasons.”


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