The Villain – The Old 97s
Sittin on a Pitchfork – Young Fresh Fellows
Am I the only one who’s having a hard time getting worked up about this AIG bonuses thing? It certainly seems that way. Don’t get me wrong: it’s certainly irritating that these bonuses exist, but I find the way it’s blown up to be rather silly for any number of reasons.
First of all, it’s produced some really nutty responses, including a number of folks who have asked why we can’t just refuse to pay the bonuses. The obvious answer is that not doing so would be illegal. “Well,” the reply goes, “so what if it is? They’re big, stupid meanies and if they want to sue, the public will revile them.”
That’s true, of course, but it’s also a tremendously instrumentalist (and rather disturbingly authoritarian) notion of the role of government. I thought we were the side who was interested in upholding principles of law – not just when it’s easy, but also when it’s difficult. You don’t just toss the law aside to make a point.
Now, the solutions which propose creating a tax rate of 100% on bonuses handed out by the companies who received bailouts seem more reasonable. There’s an argument that such efforts might run afoul of the law, but according to law-talking folks it’s probably not a strong one. And there’s a clear difference between a law which might arguably be unconstitutional and one which clearly and deliberately breaks a contract.
That said, Nate Silver makes an argument I find persuasive. Namely, that it’s a somewhat troubling when the federal government steps in so blatantly on questions like this. It quite possibly is legal, but it’s still a little bit distasteful. He likens it to the Schiavo stuff, which was in an equally gray area between legal authority to do something and the ickiness of actually stepping in.
Above all, I’m more than a bit uncomfortable with the way this has become THE story. Health care, energy, education, the incredible complexities that go into actually trying to resuscitate the financial system…all of that gets pushed aside because finally we’ve got a simple story with a clear villain. “Alright,” the country says, “we’ve found some Bad People and we want justice.”
In this instance, the justice may be simple enough to portion out. But this sort of attitude isn’t going to just go away. There’s going to be more and more demands for simple stories with easy morals, clear determinations of who is good and who is bad. And that simply isn’t going to work. This is a complicated mess and the more that the heroic populism is valorized, the more difficult it’s going to be for people to come to terms with the fact that there simply is no ideal solution. There’s no way to perfectly separate the people who deserve help on their mortgates from those who were speculating. There’s no way to fix the financial problem without it helping many of the “people who were responsible.” And there is certainly no way of learning a lesson from this if we don’t come to terms with the way that we all bear some collective guilt.
That’s the reason why I’m already quite weary of this issue. Pointing fingers and hyperventilating about bonuses only seems to confirm the version of the story where vengeance is the priority, and it must come swiftly.
Chris Bowers claims that this is a really big deal: “Just in case you thought that bloggers and media types like me are simply showing faux outrage over an issue people don’t really care about, Gallup’s latest public opinion survey disabuses us all of that notion.” But I think that misses the point. I certainly don’t deny that there is real outrage. Obviously, there is. I just think there’s a lot of real outrage over a faux issue.
People are getting out the big guns on this. “What did you know about the bonuses and when did you know it?” style stuff. But all that it really means to me is that the administration made a political mistake in misjudging how much people were going to freak out about this. The reason they didn’t make a massive effort on this until this week is because (rightly, I think) they judged about 7 million other things as being more important material issues.
Now, as I said, that was clearly a political misjudgment. And they could (and should) have resolved this before it blew up like this. But still, c’mon. I guess I just have a lot less patience for the optics of a situation. Especially when the idea of “good optics” is just a clear impossibility. I understand that people are going to be upset about this sort of thing, but it seems like progressive folks are going to be far better served by working against false expectations of easy solutions, rather than working as hard as they can to build them up.
When the financial mess is about how it “plays” – it’s always going to be bad for Obama and the Democrats. We’re in charge now and any solution is going to look bad to a LOT of people. But if we insist on perfect solutions we’re probably going to encounter every horrible cliche (making the best the enemy of the good, baby out with the bathwater, etc.), and in the process make it far more difficult to engage in the sort of damage-limitation policies that AREN’T ideal, but which have (so far) prevented a crisis from turning into a depression.
Just to be clear, I do agree that the bonuses are aggravating. And I do not buy the argument that failure to deliver them is going to somehow devastate the workability of our reform efforts. And while I feel vaguely concerned that this might have a limited spillover effect that will cause people to distrust the government’s promises, I don’t really see that as a viable argument against doing something.
Mostly I’m just frustrated by the way this has pushed aside a ton of other important questions, and threatened to support an attidue that blames individual bankers and demands clear-cut, black and white solutions. The Obama team have brought this upon themselves to a certain extent by failing to resolve this beforehand, but I think the folks pulling out the pitchforks might be well-served to think about where to go from here.
If the administration has been poor on this issue so far, Obama had a speech today that is far more promising. He said: “I don’t want to quell anger, I think people are right to be angry. I’m angry. What I want us to do though is to channel our anger in a constructive way. We need to stabilize the financial system, get credit flowing again to businesses and consumers and make sure that we change how these businesses operate so that they don’t put us in a situation in which when things go bad taxpayers have to foot the bill and when things go good folks are getting not just $6 million bonuses but $30 or $40 million bonuses.”
That’s precisely the right attitude, and I hope people who have raised arms on this are willing to take some credit for beating the populist drum but also recognize when their efforts have achieved some success. If the point of all this is that these bonuses just make people mad, then it’s pretty pointless. If the point is that the bonuses are representative of bigger problems in the system, and this helps to motivate action to start tackling those issues, then I’ll be happy.
I’ll be honest, though, that I’m a little worried the former is going to turn out to be the way this plays out.
UPDATE: Kevin Drum puts it all a lot more succinctly, pointing out that some real, actual significant news happened today in the Fed’s efforts to basically TRY to cause inflation. His conclusion: “That’s what the adults were up to, anyway. Back in make believe land, meanwhile, it was AIG bonus time 24/7. Gotta keep Congress busy with something, I guess.”
Hoods Up – Street Smart Cyclist
