I know there's all sorts of stuff flying around right now, in the short term. But my sense is that that over the longer term, the AIG outrage will get channeled and used in interesting ways by the Obama administration.
I have been thinking about the NY Times article linked in Cenk Uygur's diary from Monday. Excerpts and the rest of the diary are over the fold.
The Obama administration’s new plan to bail out the nation’s banks was fashioned after a spirited internal debate that pitted the Treasury secretary, Timothy F. Geithner, against some of the president’s top political hands.
In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.
Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.
He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.
Because of the internal debate, some of the most contentious issues remain unresolved.
[snip]
Some of President Obama’s advisers had advocated tighter restrictions on aid recipients, arguing that rising joblessness, populist outrage over Wall Street bonuses and expensive perks, and the poor management of last year’s bailouts could feed a potent political reaction if the administration did not demand enough sacrifices from the companies that receive federal money.
They also worry that any reaction could make it difficult to win Congressional approval for more bank rescue money, which the administration could need in coming months.
[snip]
But officials said Mr. Geithner worried that the plan would not work — and could become more expensive for taxpayers — if there were too much government involvement in the affairs of the companies.
Mr. Geithner also expressed concern that too many government controls would discourage private investors from participating.
I'm not into making Geithner some sort of uber-villain because ... I just don't have it in me to go there, for some reason.
I'm really more interested in this unresolved struggle that went in one direction and now has clearly backfired on the side that prevalied (Geithner's argument) and shown the wisdom of the side that did not prevail (Axelrod/other aides).
In particular, I'm interested in how this current situation offers an opportunity for some the Obama administration -- say, the David Axelrod/other aides side mentioned in the article -- to use this current situation as an "I told you so" moment to push for their perspective(s) to be more strongly reflected in policy from here on out.
I know some observers are saying this whole situation is bad for the Obama administration. Myself, I see it another way. I am less concerned with that and more concerned with how it might affect what the Obama administration actually does from here on in relation to policy on these issues.
I think that this current situation gives weight and strong permission to a perspective in the administration that might otherwise get argued away by the "well, that's nice but this is how things are done" uber-capitalist voice of pseudo-reason.
I think the Obama administration is capable of running with whatever they get broad popular permission to run with that fits with their perspectives. I think this current situation gives permission for some stuff that might not otherwise have been quite so possible.
We'll see.