Thursday, March 19, 2009


Surely, someone (Paulson or Geitner?) should have known about the compensation contracts that has resulted in this bonus mess and required their unraveling before the bail out money was released. Negotiation: The employees could well have been persuaded to negotiate because of the alternative might have been bankruptcy and loss or drastic reduction of bonuses.

It is a mess and an embarrassing distraction for the Obama administration. It is, however, important to realize that these sordid payments total a relatively small sum when compared to aggregate bail out money. Also, the bail out is not really forAIG but for the counterparties to is unwise insurance contracts, and for the financial system as a whole. The government owns 80% of AIG so the stockholders have been losers. (But why not 100%?)

Negotiation: It seems that the counterparties are getting full payment under their contracts. Why? Reductions would be in order given that otherwise they could be dealing with a company in bankruptcy.

I don't know if these contracts can be broken, but I would say let them sue for their money. Wouldn't incompetence and causing company ruin be a defense?

Question: Much is being made of the mysterious deletion of a legislative provision that, it is said, would have prevented unreasonable bonuses. But, according to what I've seen in the media, all this provision did was to tax at 35% bonus compensation in excess of $100,000. But wouldn't such a bonus, on top of a salary, already be taxed at this rate?

A related point. Many say, and it is true, that Wall Street contracts are being treated differently from blue collar union contracts in Detroit. And that is unfair. The difference is that any individual contract makes little difference whereas the requested changes in the union contracts may well save thousands of jobs.

Tuesday, March 17, 2009


White House press secretary Robert Gibbs generated some criticism when he was a bit glib when questioned about former Vice President Dick Cheney's interview with CNN's John King. He drew laughs when mentioning Rush Limbaugh and Cheney as the least popular members of the "Republican cabal".

At least one correspondent, and also Pat Buchanan, felt that Gibbs was not showing proper respect for a former vice president. Gibbs seemed to acknowledge this point but I wish that he would have responded that he would have been more respectful if the Vice President had shown more respect for the facts and the truth.

Today, Adrianna Huffington had a great column on the Cheney interview. She illustrated how much more informative it would have been had Jon Stewart conducted the interview. Stewart would have confronted Cheney on the spot when he made spurious claims and accusations.

It should also be pointed out that Cheney showed no respect for the tradition under which former Presidents and Vice Presidents refrained from criticism of their successors. By contrast, Cheney went so far as to accuse President Obama of placing our country in more risk of terrorist attacks.


Some of the News
That may be True


Wednesday March 11 - Sub-Rosa's senior investigative reporter, Ronald Davit, has obtained a discarded duplicate copy of the tape recording of part of President Obama's day in the oval office.
It appears that there are some omitted or deleted sections but we have pieced together these excerpts:

Hello, Warren, this is the President. How are things in Omaha?

Good. I want to thank you again for your help and advice during the campaign and the advice you have continued to offer. But I have to take issue with your view that I am taking on too many issues at one time and that I have to focus on the economy. Let me assure you .... oh, excuse me for a minute.

I'm back. That was Governor Sebelius and her chief of staff. They wanted clarification of one point in my health plan.

Tim Geitner and I are meeting later this afternoon to .... please hold, call coming in.

That was the Vice President, calling from Brussels. Joe needed approval of some draft language in NATO's letter to Putin. Tim and I are going to be discussing .....

(long silence)

Secretary Gates and Holbrook arrived early for their appointment. We had to make final decisions on some points in the new strategic plan for Afghanistan and Pakistan.

Tim and I feel that some clarification .... just a minute....

Thanks for holding. That was Emanuel. He needed to know which members of Congress will require strong persuasion to support a lower tax benefit for some itemized deductions in order to help fund our health plan. We have hopes .....sorry ...

That was just a draft of my speech tomorrow on our education overhaul.

As I said , I am focusing like a laser on the banking and jobs crisis. In fact .... Oh, Michelle. Yes, I will be available soon to help the kids with their homework. ....

And the Romanian delegation is here now?

Well, Warren, I know that you're very busy running Berkshire Hathaway so I won't keep you any longer. Thanks again for your help.