By The Hill Editors - 03/18/09 06:09 PM EDT
They are in charge while the walls are falling in on the country’s financial system, and while voters are mad as hell because they are losing their savings, jobs and homes.
President Obama and his legions argue that they didn’t create this mess but inherited it. But, however true or false that is, people in power get blamed. At first they get a pass, next they share a little blame, then a lot, and eventually voters don’t want to hear any more cries of, “It’s not our fault.”
Two months into the new administration and the 111th Congress, we’re somewhere between the first and second phases of this progression, with most people still blaming the past dispensation, but doubts and grievances against the new one beginning to gain a little traction.
Which is why the explosive scandal over AIG — 370 execs are to receive $450 million in bonuses, and have already received $165 million — has knocked Democrats onto their heels. Both in the administration and on Capitol Hill, the party is scrambling to claw back the money. The money is going out on the Dems’ watch.
AIG execs certainly don’t deserve to be enriched. The contracts under which they claim the lucre would be worth nothing if AIG had been allowed to collapse, so it is a bit much for those whose jobs have been rescued to demand a prince’s ransom for having been saved.
Still, that line of thinking leads to nothing more potent than an appeal to decency. Congress and the president do not, however, have to rely on the recipients’ decency. They can legislate a tax rise and capture at least those bonuses within reach of American tax law. Or they can exercise the ownership rights of U.S. taxpayers (who now have essentially an 80 percent stake in AIG) simply to ax the bonuses and let the execs sue.
One thing the Democrats cannot do, either from a moral or political standpoint, is tearfully wave goodbye to the money. Voters are boiling mad, as they should be, and they will not parse issues of contract or downside risk and let the governing power off the hook.
If Democrats fix the AIG bonuses issue, the party will continue to enjoy some leniency from voters. But if taxpayers’ money sluices into the bank accounts of people who have already cost the national treasury $170 billion, the party is going to own the economy a whole lot sooner.