Much has been made of AIG million dollar bonus giveaway in the past few days. The American people are outraged that their money is going into the pockets of some of the same people responsible for the current economic downturn, and sensing that he can’t afford to be on the wrong side of this issue, president Barack Obama has finally allowed himself to transform into The Rock Obama.
There’s only one problem with Obama’s populist outrage: his administration could have prevented the payout before the situation reached boiling point, but, according to Democratic Rep. Brad Sherman of the House Financial Services Committee, the Treasury didn’t exercise the power Congress gave it. Sherman explicates:
We had a provision in there that said Treasury was supposed to establish, by regulation, standards for executive compensation. We required that to be done — had it been done, it would have been binding, whether [or not] these contracts had been signed earlier. It’s entirely within the power of the federal government to have contracts modified [at companies receiving public aid]. Nixon had contracts modified by the federal government. We gave a similar power to Treasury.
As CEO of the country, Barack Obama has a responsibility not only to deal with the issues of the day, but to run his organization efficiently. Because a president cannot do everything in government, he must delegate responsibilities to Cabinet members – and he must take them to task if they fail to do their job. On this, at least so far, Obama has failed. Treasury Secretary Timothy Geithner abnegated the full power of his office by not modifying AIG’s contracts. Geithner also does a disservice to the country by running an understaffed Treasury, which may explain, at least in part, the department’s spasmodic impotence. If the president is going to speak of holding people accountable, he may want to start a little closer to home.
