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Obama Tries to Harness the Outrage


Obama soaked up the love in Orange County yesterday. (AP Photo/Reed Saxon)

President Obama is attempting to redirect the public fury over the AIG bonuses into outrage over the way the whole economy's been tilted toward the super-rich over the last decade -- precisely the problem he's trying to address with his hugely ambitious budget plan and his push for greater financial regulation.

It's not clear that Obama will succeed in rerouting the rage, though -- at least not yet. The public's anger, as reflected in the media, seems to be particularly focused on the fact that these wildly undeserved bonuses were paid for with tax dollars. And that happened on Obama's watch.

Nevertheless, it's understandable that he would try to use this powerful expression of public sentiment to move the country in what he considers to be a better direction. And to that end, Obama yesterday unleashed some of his most provocative language yet about the Bush-era economy, likening it to one big Ponzi scheme.

Here's the transcript of his town hall meeting in Orange County, Calif.

Obama acknowledged the anger over the AIG bonuses, and said he shared it -- then quickly pivoted to a broader critique and his proposed solution.

"But these bonuses, outrageous as they are, are a symptom of a much larger problem," he said. "And that's the system and culture that made them possible -- a culture where people made enormous sums of money, taking irresponsible risks that have now put the entire economy at risk....

"We don't need these house of cards, these Ponzi schemes, even when they're legal, where a relatively few do spectacularly well while the middle class loses ground....

"I want to describe to you the kind of economy that we want to build: an economy that rewards hard work and responsibility, not high-flying finance schemes -- (applause); an economy that's built on a strong foundation, but not one that's propelled by overheated housing markets and maxed-out credit cards."

What's important, Obama said, "is that we make sure we don't find ourselves in this situation again, where taxpayers are on the hook for losses in bad times, and all the wealth generated in good times goes to those who are at the very top of the income ladder. That's the kind of ethic we've had for too long. That's the kind of approach that led us into this mess. That is something we have to change if we're truly going to turn our economy around and move this country forward."

And long-term economic growth, he said, depends on the sorts of investments in health care, energy and education that he has proposed in his budget.

Obama tried to put the details of the AIG scandal behind him, by taking responsibility for the situation -- if not blame: "And I know Washington is all in a tizzy and everybody is pointing fingers at each other and saying it's their fault, the Democrats' fault, the Republicans' fault. Listen, I'll take responsibility; I'm the President. (Applause.) We didn't grant these contracts, and we've got a lot on our plate, but it is appropriate, when you're in charge, to make sure that stuff doesn't happen like this. So we're going to do everything we can to fix it."

Instead, what he wanted to talk about was whether he is trying to do too much at once. "Now, there are those who say these plans are too ambitious; we should be trying to do less, not more. Obama is trying to do too much, they say; just focus on Wall Street, focus on the banks," he said. "Well, I say our challenges are too large to ignore. The cost of health care is too high to ignore. The dependence on oil is too dangerous to ignore. Our education deficit is too wide to ignore. (Applause.)

"To kick these problems down the road for another four years or eight years, that would be to continue the same irresponsibility that got us to this point."

And he encouraged an anti-Washington populism that would serve his ends: "For all of you know deep down -- and what folks in Washington sometimes forget -- in the end, a budget is not merely numbers on a page or a laundry list of programs. It's about your lives; it's about your families; it's about your dreams for the future. You did not send us to Washington to stand in the way of your aspirations. You didn't send us there to say no to change -- you sent us there to get things done and bring about change, and that's what I intend to do. (Applause.)"

Obama telegraphed his intentions in a short talk with reporters before flying to California yesterday: "I don't want to quell anger," he said "I think people are right to be angry. I'm angry. What I want us to do, though, is channel our anger in a constructive way."

Scott Wilson writes in The Washington Post: "Striking a sharp populist tone, President Obama used a town hall meeting here Wednesday to argue that he is 'trying to bring balance back to our economy' after years when only the wealthiest Americans benefited from government policy and lack of regulation."

Laura Meckler writes in the Wall Street Journal: "President Barack Obama said he will take the blame for bonuses being paid at American International Group Inc. if it will settle an intense finger pointing under way over how such payments were possible at a company that has received tremendous taxpayer aid....

"The comments were an effort to change the subject, which has engulfed Washington this week, and pivot to his push to overhaul financial regulations that govern the system and that many blame for the underlying problems...

"White House officials had expected questions about AIG, given the furor over the $165 million in bonuses given to officials at the company, which has received $180 billion in government aid.... But not one person asked about the matter. Instead the questions were about issues that hit closer to home: teachers losing their jobs, immigration law, union organizing and the ability of community banks to continue making loans."

Helene Cooper writes in the New York Times that Obama's populist tone "found favor with the crowd of about 1,300 people."

Stephen Collinson writes for AFP that Obama "is deploying every weapon in the presidential armory to bolster his economic rescue strategy." He has another town hall meeting today, "as well as a spot awaiting Thursday on the couch of late night "Tonight Show" host Jay Leno...

"Next Tuesday, the president will crank his campaign up another notch with a prime time televised press conference."

E.J. Dionne Jr. writes in his Washington Post opinion column: "The president needs to do two things at once. The administration has no choice but to spend piles of money to unwind the financial mess. A share of the largess...may indirectly benefit some of the malefactors in this saga. But Obama has to be unambiguous in asserting that the purpose of this spending is not to reward those who got us into this fix but to solve a problem that affects us all.

"To make this case, the administration should be unafraid to use its proposals on health care, taxes, education, energy and financial regulation to argue that it is building a new economy on the ashes of the old -- an economy based on fair rewards to capital and labor alike, not on an ethic of greed and excess."

Meanwhile, who knew what when? David Cho and Michael D. Shear write in The Washington Post: "Federal Reserve officials knew for months about bonuses at American International Group but failed to tell the Obama administration, according to government and company officials, exposing problems in a relationship that is vital to addressing the financial crisis....

"Treasury Secretary Timothy F. Geithner, a central figure in the decision to bail out AIG last fall as president of the Federal Reserve Bank of New York, said in an interview yesterday that he had not been aware of the size of the bonuses and the timing of the payments [until March 10]....

"Two days later, Geithner told the White House."

But: "Democrats and Republicans in Congress are increasingly questioning how Geithner could not have known about the bonuses, given his past role in AIG's bailout, which has totaled more than $170 billion."

And there's still no evidence that the bonuses set off the appropriate alarm bells at the White House when officials there still had the time to block the checks from going out.

"For the new administration, the bonuses were a distraction from what senior aides called the main focus: getting the economy working and people back to work. 'People are not sitting around their kitchen tables thinking about AIG,' [senior adviser David] Axelrod said. 'They are thinking about their own jobs.' "

Is Axelrod right? Or terribly wrong? We'll know soon enough, I guess -- based at least in part on whether Obama's new pitch seems to be working.

Finally, a note about the protests outside Obama's town hall yesterday. Jennifer Muir, Doug Irving and Cameron Bird write in the Orange County Register: "On the sidewalk along Fairview Road, outside the fairgrounds, a crowd that grew to 35 waved signs and jeered as the heavy blades of Marine One and three other beige choppers sounded overhead.

"'Go back home, leave us alone!' said Elisa Mohr, her head titled up. 'Go back to Chicago. We don’t want you here!'

"'How about, ‘go back to Kenya,' Bobby Florentz suggested."

By Dan Froomkin  |  March 19, 2009; 3:40 PM ET
Categories:  Financial Crisis  
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Comments

The $165 million is not the issue - it's the way that it was handled. Everybody says that they didn't know about it and they are outraged, except that the CEO of AIG, Liddy, said that the Fed knew about it all along, and approved of it. And the chairman of the House subcommittee that held the hearing said that he had known about it for 2 months. And there's the mysterious removal of the Snow-Wyden provision in the stimulus which would have stopped this, and the modification of the Dodd provision which would have stopped it if Treasury hadn't modified it. So my takeaway from this is that Geithner, Summers, and Bernanke are going to make sure that all of the Wall Steet guys get to walk away with their pockets full, and Obama is going to let (be convinced by) them. So I don't trust these guys on the big (trillion dollar) things because they appear to be lying about the $165 million thing.

Posted by: dickdata | March 19, 2009 4:09 PM | Report abuse

Part of the problem is the short attention span and malleability of public opinion. I doubt that the amounts of these latest bonuses differs all that much from the compensation levels that these people have been enjoying all along. They've been running this Ponzi scheme for quite awhile now and enjoying the fruits all along.
The fact that people are only now noticing and becoming outraged reflects rather poorly on the flow of information in our culture.
Why was manufacturing millions out of thin air perfectly acceptable 2 years ago but outrageous now?

Posted by: PhD9 | March 19, 2009 4:53 PM | Report abuse

I was afraid of this. Obama is a Blue Dog. He tells his toadies to kill the exec comp cap and then campaigns on the anger it provokes. This lying fool will get no money, support, or votes from me. Ever.

Posted by: davidbn27 | March 19, 2009 5:04 PM | Report abuse

Obama's achilles heel was not just Geithner's mouth and bad judgment; rather it was Obama's choices of who he wanted to "fix" the problem. When you chose the rats that helped cause the problem and have no clue yourself, then you (US) get screwed!

Posted by: GordonShumway | March 19, 2009 5:42 PM | Report abuse

I would just like to tell Bobby and Elisa that if they don't care to have organized government that Mexico is very close for them to move too. And they won't have to worry or bother with the democratic process at all. See how far their worthless attitude gets them in Mexico.

Posted by: kimkimminni1 | March 19, 2009 5:58 PM | Report abuse

The opposition just doesn't get it.
They are up against a master politician, with the wind and the country following right behind him, in complete agreement with the massive job he has willingly undertaken.
We are with him in his monumental effort to restructure this country and improve our circumstances on issues for which we have been patiently waiting for years.
The GOP has no philosophical leg to stand on here.
There's a new sheriff in town and he means business.
And it's about time.

Posted by: Judy-in-TX | March 19, 2009 8:12 PM | Report abuse

For mishandling the financial crisis, for lying to the people in stating there would be no lobbyists in his administration, for appointing tax cheats to his administration, for lying aobut his relationship with Bill Ayers, and for giving away taxpayer dollars to AIG with no strings attached, we the people demand Obama be removed from office. We voted for change and he has given us nothing of the sort. We cannot afford 4 more years of this kind of change.

Posted by: smokedsalmoned | March 19, 2009 9:37 PM | Report abuse

The Stimulus Comes With Som Interesting Strings.
Some think those elected officials who indicate they won't take stimulus money are fools or have some other agenda. The fact of the matter is that they have read the Stimulus Bill and are being good stewards of their State budgets & taxpayers money. Read on for just one problem with the Stimulus.
In Utah lawmakers failed to change state law so they could get federal stimulus money meant to help the unemployed. To get the funding lawmakers would have had to change the law to allow about 4,200 jobless Utahns -- among them part-time workers and those who quit working to accompany a spouse who is changing jobs -- to get unemployment benefits. Those individuals don't currently qualify and the problem is that the Stimulus money is a one time thing so when it runs out you end up with a new or expanded program to pay for. Furthermore the Stimulus plan as written by the Dems and the Obama administration, does not allow States to put a sunset provision their laws so the expanded benefits would expire when the federal money runs out.

In Louisiana Gov. Bobby Jindal has sent formal notification to the White House that LA will tap into at least part of its share of the federal stimulus package. He has told the White House that LA will accept stimulus dollars and "use them to promote economic growth and create jobs in a fiscally responsible manner." However, he let the administration know he continues to look at the rules for each pot of money to determine which dollars the state will use. The governor already has said he intends to reject the unemployment money.

The smarter Governors have already figured out that the Stimulus is a intentional or unintentional stealth means of pushing yet another unfunded mandate / socialist agenda on the States. Three cheers for those Governors who are risking their political careers to do the right thing for their citizens.

Posted by: smokedsalmoned | March 19, 2009 9:38 PM | Report abuse

President Obama has no choice but to try to channel this river of anger into a constructive tributary of progress. If we simply dissolve into a miasma of rage and anger, we go down as a nation.
If we have a LEADER who comprehends this energy and can make our new direction understandable to us, then, we have a chance of survival.
Luckily, for me, I have full confidence in his ability to "get it". The choices he must present to us for what must happen in order to save us, are preposterous to those who believe that we are NOT in the largest crises that has ever happened to us since whenever.
I happen to believe that we really ARE in a crises. Not just a sensationalized by the media, crises, an
actual CRISES.
So, I say, go for it! Be bold, be forward looking, go ahead and try things that have never been tried before. Why? Because we really have NEVER been in such a vulnerable position before. This IS singular time.
Fortunately, for me, I believe in the guy. I believe he is doing every single thing I would hope a President would do to try to save us.
And, really, I would have believed in Bush had he demonstrated that he was doing every single thing he could think of to try and save us. But, I NEVER got the impression that he was doing that. I ALWAYS thought his own independent thought was over-run by others around him. I never garnered any confidence in him.
This guy is different. He demonstrates, day after day, that he is ahead of the curve. I believe he truly has the best interests of the nation at heart and he is doing his ultimate best to achieve the best for ALL of us.

Posted by: cms1 | March 19, 2009 10:28 PM | Report abuse

Pelosi, Obama and Reid knew full well that the bonus provision was in that bill they passed to bail out AIG. If they (and the rest of thos rats in Congress) didn't, that simply means they didn't bother to read it. And that in itself is scary as hell.

These folks have no idea what they are doing and all of this is just populist posturing to cover up there own incompetance. I don't even they understand the fascist overtones they are glibblly embracing with this whole "90%" tax on bonus thing, or even more frightening, they have no problem identifying by name who chose NOT to return the bonus/play ball. Some nut job tracks one of these people down and assualts them (or worse), you think these fools are going to be held responsible? This is thuggish mob rule crap, pure and simple.

These guys are a joke. But a dangerous joke.

Whats even scarier is the day when Obama's teleprompter becomes self aware. THEN we are in trouble.

Posted by: luca_20009 | March 19, 2009 11:35 PM | Report abuse

I think that it's clear that the Obama administration did all it could to ensure the bilking of the taxpayers.

"(CNN) — Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses."

Posted by: R2D22 | March 20, 2009 3:15 AM | Report abuse

Its funny to watch the Dear Leader running around full of anger on the AIG bonuses when they were slipped into his own stimulus bill. I remember back when the bill was being rammed through congress when the Chocolate Messiah and his lackeys in congress were telling everyone that passage of the bill was so urgent that there could be no delay with trivial matters like giving all the members a copy so they could read it or even posting it to THOMAS just to see Obama wait nearly 6 days to sign it.

I wonder if people now think it may have been a good idea to go through this monstrosity of a bill a bit closer?

Posted by: SharpshootingPugilist | March 20, 2009 10:08 AM | Report abuse

@smokedsalmoned: "we the people demand Obama be removed from office. We voted for change and he has given us nothing of the sort."

I think you missed a memo - pretending to be a disappointed former Obama supporter was the GOP meme of the week about a month ago. It didn't work then, either. But I have to admit it's pretty funny to hear Bush supporters clamoring for Obama's impeachment. It's great symbolism for how completely out of touch Republicans have become.

Posted by: BigTunaTim | March 20, 2009 10:48 AM | Report abuse


In a surprise announcement the White House has confirmed that the President's second press conference will be held out on the East Lawn.
http://www.aratunes.us/voxpopuli

Posted by: aratunes | March 20, 2009 12:38 PM | Report abuse

@smokedsalmoned: "we the people demand Obama be removed from office. "

Yeah all 35 of you.

Obama just did the equivalent of Bush holding an event in the Castro, and "a crowd that grew to 35 waved signs and jeered" The conventional wisdom inside the beltway should spend a little more time outside. All of us rubes out here in the provinces may be mad as hell at what's going on, but we're still happy we voted for Obama, and we have far more tolerance for those who are at least trying to fix this mess than for those who sit back complain and do nothing.

Posted by: foxn | March 20, 2009 1:21 PM | Report abuse

All these so called conservatives and their faux outrage about AIG is a joke.

Wasn't it Bush and Paulson who first handed money to AIG and bought the taxpayers an 80% stake in AIG? Why didn't Bush and Paulson strip AIG of the bonuses then?

Does anyone honestly believe the Republicans would be willing to strip executives of their bonuses? These are the same people who gave these same executives massive tax breaks that doubled the debt adding more than $5,000,000,000,000 to it. And after giving away $5 TRILLION to the wealthiest in our country under Bush 43 and hundreds of billions to Wall Street in bailouts with no questions asked we are supposed to believe they are sincere in their outrage over a comparatively paltry sum in AIG bonuses.

Get real, you Republicans lost all credibility regarding fiscal matters years ago. Outside of Limbaugh's crowd no one is really listening to you anymore. Get used to it.

Posted by: troyd2009 | March 20, 2009 3:09 PM | Report abuse

Oh, and in case there is any doubt about how Republicans feel regarding bonuses from taxpayer money.

87 Republicans versus 6 Democrats in the House voted AGAINST taxing the AIG bonuses.

Posted by: troyd2009 | March 20, 2009 5:37 PM | Report abuse

Hey troyd, I hope you know that the $5.3trillion that Bush "gave away to the wealthy" in his 8 years will be dwarfed by those estimated for the Chocolate Jesus.

Posted by: SharpshootingPugilist | March 20, 2009 5:51 PM | Report abuse

Class warfare has begun.

Posted by: sjfone | March 20, 2009 11:12 PM | Report abuse

When Obama says his comprehensive immigration reform will NOT be a FREE RIDE, I hope that means that individuals who have made up a Social Security Number or stole someone elses SSN will be prosecuted - a federal felony punishable up to five years in prison and $250,000 fine then of course, they will be deported.


And to quote Warren Buffet "If there is class warfare then we're winning".

Posted by: kendog100 | March 21, 2009 1:19 PM | Report abuse

Doesn't Geithner bear a remarkable resemblance to wormtongue from 'The two Towers' This is a survey,just answer "Yes" or "No".

Posted by: Bronski | March 21, 2009 8:40 PM | Report abuse

Go, President Obama, go.

Remember your critics are the architects of the recent 8 disastrous years.

Oh, the crocodile tears...

Posted by: chauncykat | March 22, 2009 12:07 AM | Report abuse

I Audaciously Hope He Fails...


I think we can all agree that of Americas first round of socialism, through which FDR brought: Income taxes, the governmental support & creation of unions,Wage and price controls, Welfare, Social Security, have all proven to be a competitive burdens that , in the long term, were helpful in driving manufacturing out of the U.S. and will be unsupportable by the generations after the baby boomers. Therefore, I do in fact hope that Obama fails in his efforts to create further socialist entitlement plans that will further destroy the free market system which made this country great.
You can distort a persons words on Obama, but none of us actually want him to fail in improving the United States. We just want him to fail in his efforts to implement harmful things to the American economy like enacting socialist programs that have a proven track record of harm.

Posted by: smokedsalmoned | March 22, 2009 6:21 PM | Report abuse

Dems Fear Obama Deficit - Shouldn't You Be?
Running up deficits and spending did not lead us out of the Great Depression. Obama's huge deficit budget won't get us out of a recession either. We will eventually come out of it and economists will once again prove that government does not create jobs but just moves money around and upsets the speed of an economies recovery.
Even leading democrats are balking at Obama's deficit spending ways. Democratic Rep. Gene Taylor of Mississippi took a shot at Obama’s budget, saying “change is not running up even bigger deficits that George Bush did.” They know that creating programs that can never die, amassing huge debt, devaluing the dollar and increasing the cost of money through debt financing is not good for America in the long run.

Here's hoping that Obama takes that "Team Of Rivals" book off his night stand and soon begins to read up on the Great Depression but with some titles that were not written socialist / Marxist leaning economists.

Posted by: smokedsalmoned | March 23, 2009 7:11 AM | Report abuse

Socialism. Socialism. Socialism! Socialism. Socialism socialism, socialism socialism socialism. Taxes. Socialism SOCIALISM SOCIALISM!

Socialism,
Socialism.

Posted by: BigTunaTim | March 23, 2009 12:20 PM | Report abuse

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