The anger over AIG continues to swell, roiling the political waters. The rather unfairly beleaguered Edward Liddy, who came out of retirement at the government's request six months ago to sort out the AIG mess, got a pelting from grandstanding congressmen when he appeared in front of a committee on Capitol Hill yesterday.There's a line between responding to the public's anger and stoking it irresponsibly. In my view, that line comes right about the point when you start demanding that names be published:
Asked by Rep. Barney Frank (D-Mass.) to provide the names of those who have kept the money, Liddy balked, saying he feared for their safety in light of written threats, including one that said, "All the executives and their families should be executed with piano wire around their necks."
(Presumably this letter was signed by one Senator Grassley)
Liddy replied that he would, if the names would remain confidential. "I won't give you that assurance, sir," Frank shot back. "And if you feel unable to do that, then I will ask the committee to subpoena them."
Not pretty. In a rather interesting political subplot, a split has opened up between Washington's Republicans and the rabble-rousers of the base, who are in fact playing the role of rabble-dousers in this instance.
Republicans on the Hill have stood with Democrats in demanding that the bonuses be returned. According to Sean Hannity and Rush Limbaugh they're wrong, because (a) The government will simply be stealing money that has been legally earned, (b) This is turning into a McCarthyite witchhunt, and (c) the free market is always right.
Unusually, I find myself in agreement with Limbaugh and Hannity on this. I don't share their unwavering belief in proposition (c) but I do think they're essentially right about (a) and (b) (notwithstanding the glaring irony of Limbaugh using the term "McCarthyism" as a criticism when we all know that if he'd been on air in 1953 he would have been right out in front of Joe & co. in demanding the heads of pinkoes everywhere).
This whole affair is like the British controversy over RBS and Sir Fred Goodwin, although, this being America, it's being played out with more sound and fury and painted in more lurid colours. Sir Fred has no anonymity, of course, but at least with him, the question of culpability is clear. He was the boss. In the case of the AIG recipients, I'm not at all clear how much each of individuals concerned can be blamed for the collapse of their company. What I do know is that singling them out as culprits for the collapse of the US economy offers shallow satisfaction and obscures a clear-eyed debate about what to do next.
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