Obama's Vindictiveness Gap

By Dan Froomkin
1:12 PM ET, 03/17/2009

Obama speaking to small business owners yesterday. (Ron Edmonds - AP)

Barack Obama, who rose to power based at least in part on his calm, cerebral and empathetic nature, now risks falling out of sync with the electorate because he's not a vindictive man -- and the nation is in a vindictive mood.

The current wave of public outrage over bonus payments paid by AIG may well recede quickly. But populist anger doesn't play to Obama's strengths -- and at the very least distracts attention from his agenda.

Obama wanted us to be talking yesterday about his plan to help get credit flowing to small businesses. He wanted us to be talking today about his renewed pitch for his budget proposal -- and maybe about his Irish heritage. Instead, all we seem to be able to talk about is AIG.

The whole bank rescue issue is, in fact, something of a political loser for Obama -- as it would be for any president. In the best-case scenario, we spend billions to return the credit markets to how they used to be. In the meantime, the massive dollar amounts, the incredibly complicated landscape and the inevitable compromises involved make him hugely susceptible to attacks from the left, from the right, and from cynics of all persuasions.

Obama is certainly a populist in a lot of ways -- he campaigned as a champion of the little guy, his policies are intended to reverse the recent redistribution of wealth toward the wealthy, and he is making a variety of efforts to stay connected to average Americans.

But this isn't the first time he's been slow to embrace a growing populist anger. You may recall how back in late January, he initially responded quite discreetly to the revelation that executives at Citibank -- who received a $45 billion infusion of tax dollars -- were about to take deliver of a $50 million corporate jet. (He eventually expressed high dudgeon.)

I speculated at the time that he was overly focused on not upsetting Republicans and Wall Street. Now I wonder if it's some combination of other factors, one of them being the overall slowness to anger that, as we've seen in the past, lets him brush off criticism and reach out to even the most antagonistic political opponents. Another possible factor is that he continues to surround himself with economic advisers who come from the Wall Street culture where what the rest of us would consider obscene payments under any circumstance have been rationalized for years now.

In any case, the sequence of events revolving around the AIG bonuses just does not reflect well on his administration, from its initial lack of sufficient outrage to what now appears to be an utterly unpalatable resolution:

Edmund L. Andrews and Jackie Calmes write in the New York Times: "President Obama and his top economic advisers scrambled to calm a nationwide furor on Monday over bonuses paid at the American International Group, even as administration officials acknowledged they had known about the issue for months.

"One day after the economic advisers insisted that their hands had been tied by contracts requiring the payments, Mr. Obama ordered the Treasury Department to 'pursue every single legal avenue to block these bonuses' and make the American taxpayers whole...

"But as anger from lawmakers escalated and criticism of the retention bonuses overshadowed other news for a second consecutive day, White House and Treasury officials offered only a general sense of how they would carry out Mr. Obama's order and few explanations for why they had not acted earlier.

"White House officials said the Treasury would recapture the bonus money by writing new requirements into a $30 billion installment of government aid scheduled to go soon to the ailing insurance conglomerate. The government has already provided $170 billion in taxpayer assistance to keep A.I.G from failing and now owns nearly 80 percent of the company.

"But administration officials conceded that almost all of the most recent round of bonuses, totaling $165 million, had been paid last Friday, one day before the Treasury publicly acknowledged that it had reluctantly approved the payouts. The officials said that people who received the bonuses would probably be able to keep them.

"By seeking to link repayment of the bonus money to the coming $30 billion in assistance, the administration seemed to leave open the possibility that the company would effectively be repaying taxpayers with taxpayer money. A Treasury official disputed that taxpayers would be repaying themselves, but could not specify how else the company would give back the money."

Jonathan Weisman, Sudeep Reddy and Liam Pleven write in the Wall Street Journal: "The confusion that seemed to mark the White House's AIG response Monday illustrates the bind that Mr. Obama finds himself in. He needs to convince Americans he shares their mounting fury over the hundreds of billions of taxpayer dollars being pumped into companies like AIG. At the same time, he needs the executives and employees of those companies to help the government untangle the current financial mess....

"White House aides said that administration officials had been consistent in their statements on the issue over the past few days. But the tone did appear to shift. Appearing Sunday on ABC's 'This Week,' the president's top economic adviser, Lawrence Summers, called the bonuses 'outrageous,' yet left the impression that little could be done. 'The easy thing would be to just say, you know, 'Off with their heads,' and violate the contracts,' he said. 'But you have to think about the consequences of breaking contracts for the overall system of law.'

"A little more than 24 hours later, the president seemed to promise much bolder action. Then by late afternoon Monday, White House and Treasury officials echoed the Summers position that nothing could be done about payments already made."

Here's what Obama had to say about AIG yesterday.

"[I]t's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?...

"I think [AIG CEO Edward] Liddy and certainly everybody involved needs to understand this is not just a matter of dollars and cents. It's about our fundamental values. All across the country, there are people who are working hard and meeting their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. You've got a bunch of small business people here who are struggling just to keep their credit line open -- that they are foregoing pay, as one of our entrepreneurs talked about, they are in some cases mortgaging their homes, and doing a whole host of things just in order to keep things afloat. All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules. And that is an ethic that we have to demand."

The words were effective. But his demeanor, and the context, were his undoing.

Dana Milbank writes in his Washington Post column: "Obama was left looking like a pitiful giant as his aides explained that there was absolutely nothing they could do to stop the obscene payouts -- even though the government owns 80 percent of AIG.

"As the president read from his teleprompter yesterday about 'this outrage to the taxpayers who are keeping the company afloat,' he developed a tickle in his throat and tried to clear it. 'Excuse me,' he joked. 'I'm choked up with anger here.'

"But not enough....

"[I]f the president wants to keep ahead of the public fury, he'll need to do more than share the concerns; he'll need to act on them."

Washington Post opinion columnist Eugene Robinson blogs: "When the president was a candidate, his staff referred to him as 'No Drama Obama.' That's the way he is: cool, steady, no histrionics, no distractions, keep your eye on the ball. This is a moment, however, when he ought to get in touch with his anger -- and let everyone witness the encounter.

"Americans are well ahead of their political leaders in their outrage at the greed and irresponsibility of the preening Wall Street 'geniuses' who wrecked the economy. The White House obviously has realized that in order to orchestrate a recovery -- which will surely necessitate another bailout, however it's framed -- the president will have to get out in front of the public's anger and try to channel it in the directions he wants it to flow. Confronted with the egregious AIG bonuses, Obama did the right thing: He came out before the cameras and told everyone how outraged he was.

"But righteous anger doesn't seem to come naturally to him. I happened to read his prepared remarks before he delivered them, and they looked plenty wrathful. When he spoke, though, he sounded… analytical. Unruffled. Reasonable....

"When he coughed and said 'Excuse me, I'm choked up with anger here,' he almost seemed to adopt an air of ironic detachment. Believe me, Americans aren't feeling ironically detached about much of anything right now."

Mike Madden writes for Salon: "If there's any point the bonus brouhaha should drive home, once and for all, inside the Beltway, it's that the financial collapse has gone way past the point of 'shame on you.' Unless the government gets tougher with the banks it now owns huge stakes in, the Obama administration itself may be soon be bellowing 'shame on me.'"

So how serious a political problem is this for Obama? Enormous, according to the front page of the Washington Post.

Under the heading "An Imperiled Agenda", Michael D. Shear and Paul Kane write: "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....

"White House aides grasped for actions that could soothe sentiment on Main Street and in the halls of Congress, where the fate of the new president's sweeping agendas on health care, climate change and education will be decided....

"But the damage control did not seem to satisfy incredulous lawmakers in both parties, who said the image of financial executives taking huge bonuses from a taxpayer-funded rescue puts the president in a politically impossible position....

"The Obama administration was already facing a skeptical public and members of Congress critical of the huge sums of money the government has allocated to shoring up the devastated financial system.

"News of the latest AIG bonuses only compounded the political problems that the huge expenditures pose for the president."

It's true that, as Shear and Kane note: "House Minority Leader John A. Boehner (R-Ohio) said the bonus issue added to his belief that there will be almost no Republican support for any expansion of a bank-bailout program that passed Congress last fall with broad bipartisan support." (Although was anyone counting on much GOP support for anything Obama proposed right now?)

And some 79 House Democrats wrote an angry letter to Treasury Secretary Timothy Geithner yesterday asserting that "using taxpayer funds from the Wall Street bailout to pay bonuses completely undercuts the President's goal....

"These kinds of abuses of the public trust will only threaten any future efforts by President Obama's Administration to intervene in the financial markets. For the sake of the President's ability to continue to take the steps that may be necessary to rebuild our economy, there must be a stronger response than simply decrying this development."

But I think this may just be the latest in what Washington Post media critic Howard Kurtz so correctly calls "the daily drumbeat in the punditocracy...that Obama who promised so much hasn't made much headway."

Kurtz explains: "First he was blamed for the plunging stock market, until there was a slight rebound. Then he was roundly criticized for trying to do too much at once, a theme that was reprised Sunday on 'Meet the Press.'

"And now the august chroniclers of the MSM are raising questions about whether our new president knows what the hell he's doing....

"The president is pushing a big agenda that is, of course, fair game. But it seems to me he's stuck in an uncomfortable limbo. He inherited huge problems that forced him to start drafting economic legislation even before taking the oath. He rammed through a huge stimulus plan in record time and unveiled a new bank bailout plan. But even under the best of circumstances, these efforts are going to take time to show results."

Is there anything else Obama could do, regarding AIG?

Andrew Ross Sorkin makes the case in the New York Times that the president has little choice: "A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it."

But Jim Puzzanghera and Tom Hamburger write in the Los Angeles Times about a more assertive approach: "New York Atty. Gen. Andrew Cuomo, whose office has been investigating AIG's executive compensation packages, is trying another approach in pursuit of the bonus money....He's trying to determine whether AIG committed fraud in agreeing to the bonuses early last year despite growing multibillion-dollar losses that would have prevented them from being paid."

And Roger Lowenstein writes in his Bloomberg opinion column: "The company says it's afraid of being sued. But contrary to what lawyers and legalistic bureaucrats will tell you, there are worse things than lawsuits. Stiffing taxpayers to pay gluttonous derivatives traders -- and in the midst of an economic crisis -- is among them....

"Seven employees will get at least $3 million and one will get $6.5 million....

"Assuming the checks haven't been cashed yet, here is what Geithner should say to Liddy: 'Sorry, Ed. We'll keep track of what we promised, and maybe in a couple or three years, if AIG is earning money, and a pool exists (outside of taxpayer funds) to pay bonuses, then OK.'

"If its traders end up suing to get their full bonuses, the company (and the government) could claim that the promised bonuses were a 'fraudulent conveyance.' This defense is usually employed in bankruptcy cases. Under the theory of fraudulent conveyance, it is illegal to transfer assets that are needed to pay creditors. So, if the owners of a highly leveraged company give themselves a big dividend, leaving the corporation unable to service its debts, the creditors can sue to reclaim the funds."

Cheney Makes an Easy Target

By Dan Froomkin
11:34 AM ET, 03/17/2009

Former vice president Dick Cheney didn't hold back on Sunday when asked what he thought of President Obama. Among other things, he accused Obama (without providing any supporting evidence) of making Americans less safe.

But did Cheney realize how much relish the White House would take in casting him as the face of the opposition?

Over the last several weeks, the White House has been delighted by right-wing talk show giant Rush Limbaugh's emergence as the unofficial spokesman for the Republican Party.

But, heck, Dick Cheney makes Rush Limbaugh look popular, not to mention easygoing.

Here's Press Secretary Robert Gibbs at yesterday's press briefing, responding to a question about Cheney's comments:

Gibbs; "Well, I guess Rush Limbaugh was busy -- (laughter) -- so they trotted out the next most popular member of the Republican cabal. (Laughter.)

"I would say that the President has made quite clear that keeping the American people safe and secure is the job -- is the most serious job that he has each and every day."

Gibbs then offered his own pointed critique of Cheney's tenure: "I think the President saw over the past seven-plus years the delay in bringing the very people to justice that committed terrorist acts on this soil and on foreign soil...I think the American people will in this administration see those actors brought to the swift and certain justice that was not brought to them in the previous administration."

As for Cheney's thoughts on domestic policy, Gibbs said, "I think there are -- I think not taking economic advice from Dick Cheney would be maybe the best possible outcome of yesterday's interview."

Gibbs's comments seemed to take aback CBS White House correspondent Chip Reid, who returned to the subject later in the briefing:

Reid: "And could I ask you, when you referred to the former Vice President, that was a really hard-hitting, kind of a sarcastic response you had. This is a former Vice President of the United States. Is that -- is that the attitude? Is that the sanctioned tone for the former Vice President of the United States, from this White House?"

Gibbs replied: "Sometimes I ask for forgiveness rather than for permission, Chip. But no, I hope my sarcasm didn't mask the seriousness of the answer...-- that for seven-plus years the very perpetrators that the Vice President says he's concerned about weren't brought to justice."

Scott Wilson writes in The Washington Post: "Gibbs's comments reflected the administration's pique over Cheney's wide-ranging remarks made Sunday on CNN, his first televised interview since leaving office. The former vice president, deeply unpopular in opinion polls, accused the young administration of using the abysmal economy to push through a broad and liberal expansion of government and strongly defended Bush-era policies at home and abroad."

As for the interview that sparked the back-and-forth, Andrew Sullivan blogs for the Atlantic on CNN host John King's failure to ask Cheney about the newly-leaked International Red Cross report that unequivocally calls the treatment of terror suspects by Cheney and Bush torture. Sullivan concludes that "telling the truth - and confronting the powerful with it - ruins the aura of objectivity; and offends sources whom one needs for future scoops. It makes an interview unpleasant and confrontational, when both Cheney and King go out of their way to signal their familiarity and almost friendship with one another. King did ask some tough questions in this interview, but not the question that every historian will want to ask and that Cheney didn't want to answer."

And Arianna Huffington writes on her blog: "Each time King let Cheney get away with spouting gross inaccuracies and revisionist history, I kept thinking how different things would have been had [Comedy Central's Jon] Stewart been asking the questions. Stewart without the comedy and without the outrage -- just armed with the facts and the willingness to ask tough questions."

Quick Takes

By Dan Froomkin
11:29 AM ET, 03/17/2009

The Washington Post editorial board writes: "Full disclosure is one way of undoing the damage done by the secret prisons and Guantanamo. It should not be left to the International Red Cross to document alleged instances of torture and other abuses; the United States should show itself capable of investigating and fully disclosing its own human rights violations."

Philip Shenon writes for Newsweek that the 9/11 Commission "appears to have ignored obvious clues throughout 2003 and 2004 that its account of the 9/11 plot and Al Qaeda's history relied heavily on information obtained from detainees who had been subjected to torture, or something not far from it. The panel raised no public protest over the CIA's interrogation methods, even though news reports at the time suggested how brutal those methods were. In fact, the commission demanded that the CIA carry out new rounds of interrogations in 2004 to get answers to its questions."

Carol J. Williams writes in the Los Angeles Times: "Former Defense Department General Counsel William J. Haynes II is the first of several former policymakers the National Lawyers Guild wants reprimanded, suspended or disbarred for their roles in detainee abuse....A similar complaint is being prepared in Pennsylvania against former Justice Department lawyer John C. Yoo, the UC Berkeley law professor who is currently a visiting professor at Chapman University School of Law in Orange, for his role in drafting the legal guidelines that approved enhanced interrogation techniques including waterboarding."

Charlie Savage writes in the New York Times: "A leading Republican senator maintains that President Obama is violating a campaign promise with his claim that he can bypass whistle-blower protections for executive branch officials who give certain information to Congress. The lawmaker, Senator Charles E. Grassley, Republican of Iowa, sent a letter to Mr. Obama on Friday that condemned a signing statement the president attached to the $410 billion catchall spending bill he signed into law last week."

Kimberly Hefling writes for the Associated Press: "President Barack Obama on Tuesday selected Pittsburgh Steelers owner Dan Rooney to be U.S. ambassador to Ireland, turning to a lifelong Republican who provided the Democrat critical campaign support during the White House race."

Larry Margasak writes for the Associated Press: "President Barack Obama will nominate a moderate Indiana judge for a federal appeals court, as he begins to remake the federal judiciary, the White House announced Tuesday."

Philip Rucker writes in The Washington Post: "Two months into office, Obama has visited seven federal agencies' headquarters, each time appearing with his Cabinet secretaries and addressing workers. As he makes the rounds, Obama is inspiring longtime career employees with his speeches and asking them to be a partner in his agenda to change the culture of Washington."

Michael J. Sniffen writes for the Associated Press: "President Barack Obama is promising to reinvigorate the Freedom of Information Act by opening more of the government's filing cabinets without a fight. It can't happen soon enough for the people awaiting replies to more than 150,000 requests for information." Sniffen then describes some of the AP's own outstanding requests.

Helene Cooper writes in the New York Times: "President Obama will be making a guest appearance on 'The Tonight Show with Jay Leno' on Thursday, a White House official said, in a rare personal visit by a commander in chief to late night television. Mr. Obama will swing by the Leno show as part of his trip to southern California. The White House official said that Mr. Obama plans to talk about the economy with Mr. Leno and said he will try to focus on substance, possibly a tall task given the show's format."

Howard Kurtz writes for The Washington Post: "Going on a late-night comedy show has become a standard technique for presidential candidates, who hope to humanize themselves -- and reach a broader audience -- by displaying an actual sense of humor. But is it a wise move for a sitting president? At a time when he's struggling with a tanking economy and a banking bailout mess?"

Joe Curl writes for the Washington Times: "The White House on Monday held a super-secret 'background briefing call with senior administration officials,' shielding the high-level presidential aides so they could speak frankly about President Obama's new plan to assist small businesses."

The Associated Press reports: "Joe Biden said that while he did not seek out the vice presidency, a moment at the Democratic National Convention in Denver between his granddaughters and President Barack Obama's daughters erased any doubt he had about taking the job."

Michael Saul writes in the New York Daily News: "A German frozen food company seeking to capitalize on President Obama's popularity recently began marketing a new fried chicken product called 'Obama Fingers,' sparking outrage from African-Americans on this side of the Atlantic."

Obama Support Still Strong

By Dan Froomkin
9:47 AM ET, 03/17/2009

The new poll getting the most attention this morning is the one from the Pew Research Center, which shows President Obama's job approval rating down to 59 percent, from 64 percent in February.

But a look beneath the surface of that poll -- and at some other recent surveys -- suggests that the public is still solidly behind Obama and his overall agenda.

The complete report from Pew finds that: "In recent weeks, Obama has come under increasing criticism for trying to tackle too many issues in his first few months in office. A majority of Americans (56%) reject that criticism, saying he is doing about right, though 35% say he is trying to address too many issues at once. Most Republicans (53%) say that Obama has taken on too many issues, as do 36% of independents. Just 21% of Democrats agree....

"There is widespread support for some of Barack Obama’s key budget proposals -- particularly those dealing with changes in the tax structure. But opinion on other key proposals is more evenly divided.

"More than eight-in-ten (82%) of the public say it is the right thing for the government to reduce taxes for middle and lower income households compared with only 14% who say it is the wrong thing. A smaller majority (61%) supports raising taxes on people with incomes of $200,000 or more. Somewhat fewer (55%) has a positive opinion of limiting tax deductions upper income people can take for charitable contributions...

"The public is divided over whether Obama has proposed spending too much money or about the right amount to address the economic situation; 39% say he has proposed spending too much, 34% say about the right amount, while 13% say he has not proposed enough spending."

Interestingly, "somewhat fewer describe Obama himself as liberal than did so during the presidential campaign. Currently, 43% identify Obama’s ideology as either moderate (26%) or conservative (17%); about the same percentage says he is a liberal (44%). Last October, a few weeks before the election, a majority of the public (52%) identified Obama as a liberal."

One significant danger sign for Obama is that 48 percent of Americans say bailing out banks and financial institutions that made poor financial decisions makes them angry -- and another 39 percent said it bothers them.

None of this is redounding well to Obama's political opponents, by the way: "In fact, approval of Republican congressional leaders has fallen from 34% in February to 28% currently, the lowest rating for GOP leaders in nearly 14 years of Pew Research surveys."

CNN's latest poll finds Obama's numbers down, but not as much as Pew. Paul Steinhauser writes for CNN: "Obama's job approval rating stands at 64 percent in a CNN/Opinion Research Corp. survey released Monday. That rating is down 3 percentage points from mid-February.

"When asked about the economy, 59 percent of respondents approve of how Obama's performing, with 40 percent disapproving.

"'Most of the Americans who disapprove of Obama are Republicans,' said Keating Holland, CNN's polling director. 'His approval rating is 59 percent among independents and over 90 percent among Democrats, but two-thirds of Republicans have a negative view of his actions in office so far.'...

"'There's a lot of good will toward President Obama in this poll. Americans overwhelmingly hope he will succeed. They believe he will succeed, and they support his economic recovery program. But we're seeing growing doubt about some details,' said Bill Schneider, a CNN senior political analyst....

"A big political question is whether this recession will become Obama's. The poll suggests that the president may have some time on his hands. If the economy does not improve over the next year, 54 percent said they'll still blame former President Bush and the Republicans for the mess, with 32 percent pinning the blame on Obama and the Democrats who control Congress."

And Gallup's Frank Newport offers some context: "President Barack Obama's job approval rating, at 61% in the latest three-day average of Gallup Poll Daily tracking, is slightly above where George W. Bush's and in particular Bill Clinton's were at this point in mid-March of the first years of their administrations.

"Gallup's mid-March job approval rating for Bush, measured March 9-11, 2001, was 58%, with 29% disapproval. Gallup's March 12-14, 1993, approval rating for Clinton was 53%, with 34% disapproval. Both of these approval ratings are lower than Obama's current 61%. Bush's disapproval rating in mid-March 2001 was about the same as Obama's is now (28%), while Clinton's disapproval rating was significantly higher.

"These comparisons suggest that President Obama is holding his own compared to the two presidents who came before him, despite some decline in his approval rating since his inauguration on Jan. 20."

Looking at graphics from Pollingreport.com and 538.com, what becomes clear is that Obama's approval ratings haven't really declined that much -- it's his disapproval numbers that have gone up sharply. Call it the Limbaugh effect.

UPDATE: CBS News reports: "Despite the many economic problems facing the country now, President Obama’s job approval rating remains unchanged, at 62%, and a growing number of Americans think the country is headed in the right direction." The CBS poll actually finds that more Democrats and independents approve of Obama now than did when he took office. Fewer Republicans do, however, making it a wash.

What do you make of the polls? Share your thoughts in comments.

Late Night Humor

By Dan Froomkin
9:20 AM ET, 03/17/2009

Stephen Colbert embraces the angry populist outrage against AIG and breaks out his pitchfork: "Well, the government can't stop them, but we can, folks. Nation: Our founding fathers knew that when the rights of the people get trampled, we must become a torch-and-pitchfork wielding mob, empty of all thoughts, an injured, vengeful animal lashing out blindly at shapes and colors! Let's go get AIG!"

Cartoon Watch

By Dan Froomkin
9:13 AM ET, 03/17/2009

Lee Judge on Obama's GOP critics, and Tom Toles, John Sherffius, Mike Luckovich, Stuart Carlson, Jeff Danziger ,Bruce Plante, J.D. Crowe and Jeff Darcy on AIG's bonuses.

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