From the front page of the March 17, 2009 Washington Post:
AN IMPERILED AGENDA: Anger Over Firm Depletes Obama's Political Capital
President Obama's apparent inability to block executive bonuses at insurance giant AIG has dealt a sharp blow to his young administration and is threatening to derail both public and congressional support for his ambitious political agenda.
Politicians in both parties flocked to express outrage over $165 million in bonuses paid out to executives at the company, demanding answers from the president and swamping yesterday's rollout of his efforts to spark lending to small businesses.
The populist anger at the executives who ran their firms into the ground is increasingly blowing back on Obama, whom aides yesterday described as having little recourse in the face of legal contracts that guaranteed those bonuses.
White House press secretary Robert Gibbs, peppered with questions about why the president had not done more to block the bonuses at a company that has received $170 billion in taxpayer funds, struggled for an answer yesterday afternoon. He explained that government lawyers are "looking through contracts to see what can be done to wrest these bonuses from their recipients."
The irony of Obama being burned by his own class warfare flame thrower is very rich indeed. However, with the Administration's mantra of "never let a crisis go to waste" this will not end well for proponents of capitalism. Both Republicans and Democrats are jumping on the populist bandwagon against executive pay and perks. Given the current political climate it would be almost impossible for Republicans or Democrats to vote against legislation giving the President authority to limit executive compensation.
The only remaining question is: Where does the parade end? Regulation of companies receiving bailout money? Companies regulated by the Fed? Companies whose securities are regulated by the SEC? Companies registered to do business with the GSA?
Tom Suhadolnik is a serial entrepreneur and management consultant living in Kent, Ohio. Tom can be reached at tom - at - suhadolnik.com
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