Corn has broken stories on presidents, politicians, and other Washington players. He's written for numerous publications and is a talk show regular. His best-selling books include Hubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq War.
| Fri Mar. 20, 2009 5:50 AM EDT | Scheduled to publish Fri Mar. 20, 2009 5:50 AM EDT
On Wednesday afternoon, as President Barack Obama was leaving the White House for a town hall meeting in California, he spoke for 15 minutes to reporters about the AIG controversy. Responding to the rising rage over the $165 million or so in bonuses paid to executives at the bailed-out insurance firm, Obama noted that he was quickly developing policies to prevent future AIG-like catastrophes. And he slammed Wall Street's culture of "excess greed, excess compensation, excess risk taking." To demonstrate that he's committed to battling such greed, the president cited his work in the Senate to rein in executive compensation. Noting that he and Rep. Barney Frank (D-Mass.) had each introduced legislation on this front in 2007, Obama declared that "there were some people who attacked us, saying government has no business doing that."
One of Obama's opponents at that time was Mark Patterson, a lobbyist then for Goldman Sachs, the investment banking firm, which opposed the Frank-Obama initiative. Yet Patterson is now chief of staff to Treasury Secretary Timothy Geithner, the embattled point man in the Obama administration's endeavor to undo the notorious AIG bonuses. That is, a Washington influence-peddler who worked against Obama's effort to limit excessive corporate pay is now a key member of the Obama administration team that is supposed to contain excessive compensation in the AIG case and in general.
Former Senator Chuck Hagel, a Republican from Nebraska, has weighed in on his party's Rush wars.
Rush Limbaugh is "the center of gravity" of the Republican Party, and "we need a new center of gravity," Hagel told me on Tuesday night.
That evening, Hagel was taping an interview with Rachel Maddow for her MSNBC show. Now cochairman of the Commission on United States Policy Toward Russia, he discussed Russian President Dmitri Medvedev's announcement that Russia would begin a "large-scale rearming" and the news that Russia might be putting long-range bombers in Cuba and Venezuela. On the segment, Hagel, who was a foreign policy leader in the Senate, talked about his recent trip to Moscow and called for moving the US-Russia relationship back to a "smart" track. He also criticized former Vice President Dick Cheney for claiming that the Obama administration has placed the nation in danger and noted that Cheney was partly responsible for the "mess" the Bush administration left behind.
On the show, Hagel took a shot at new Republican Party chairman Michael Steele. Asked about Steele's threat to support primary challengers against Republican Senators Arlen Specter, Susan Collins, and Olympia Snowe, who each defied GOP leaders and voted for Obama's stimulus package, Hagel called it "a very foolish, foolish move," commenting, "there's no room for that kind of silliness." He added, "People expect serious people to deal with serious issues and to govern seriously. And when you don't do that, you become irrelevant."
Maddow did not ask Hagel about Limbaugh. But prior to the taping, Hagel was not shy about bemoaning Limbaugh's drag on his party. He told me that Limbaugh was the opposite of what the Republican Party needs now. "We blew eight years of governing," Hagel said, excoriating GOPers for having "run up" the national debt. "You can only blame Ted Kennedy for so much," he remarked.
Hagel's comments about Limbaugh were not surprising. Before he left the Senate last year, after serving two terms, Hagel developed the reputation of an independent Republican. He flirted with a presidential run in 2008 and then backed off. Last summer, he practically endorsed Obama, traveling to Iraq with the Democratic candidate, when John McCain's campaign was attacking Obama for being soft on defense and accusing him of wanting to lose the war there.
The Rush wars, though, have abated in the past week. Steele has moved on, after apologizing to Limbaugh for calling his broadcasts "ugly" and "incendiary." Pro-administration groups have throttled back on the anti-Limbaugh ads. The mini-uproar over Limbaugh's offensive reference to Ted Kennedy's possible death has subsided. (The new GOP cat-fight is a three-way dust-up involving Laura Ingraham, Meghan McCain, and Ann Coulter.)
But Limbaugh's not fading away, and Republicans will continue to have to figure out their party's relationship to the radio provocateur. And Hagel, for one, does not want his party--he still calls himself a Republican--to be fall prey to Limbaugh's gravitational pull.
That's the problem that Barack Obama is encountering. The federal government on his watch has poured tens of billions of dollars into AIG. And then comes the news that the failed insurance giant has awarded its execs hundreds of millions of dollars in bonuses. Though these rewards were set up by contracts established before the feds showered AIG with taxpayer dollars, the Obama administration is in a position to get blasted for this. After all, it's hard for the Obama White House to defend shoring up AIG with $170 billion in money from the Federal Reserve while its executives are scoring big.
Assuming propping up AIG is good policy, Obama has to sell this rescue--and all the others--to the public, and that's not any easier if AIG execs are lining their own pockets at the same time. Treasury Secretary Timothy Geithner has tried to pressure AIG chief Edward Liddy on these bonuses, and Liddy has attempted to hold firm, claiming much of these bonuses are necessary for the firm to retain talent. (Obvious response: if this is what you call talent, perhaps it's time to hand AIG over to amateurs.)
So Obama has to attack AIG while aiding it. He took a stab at this on Monday morning. At a White House appearance, when he was supposed to be talking about his plans to bolster small businesses, he took the opportunity to poke at AIG:
[AIG] is a corporation that finds itself in financial distress due to recklessness and greed.
Under these circumstances, it’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?
In the last six months, AIG has received substantial sums from the US Treasury. I’ve asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole....This isn’t just a matter of dollars and cents. It’s about our fundamental values.
All across the country, there are people who are working hard and meeting their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses....All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules. That is an ethic we must demand.
What this situation also underscores is the need for overall financial regulatory reform, so we don’t find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions, so we have greater authority to protect the American taxpayer and our financial system in cases such as this. We will work with Congress to that end.
Will this approach--slam AIG, help it survive, and push financial reregulation--work politically? It probably depends on how much feeling--and what sort of feeling--Obama puts into the slamming part. A little anger won't hurt. There may be building--or seething--outrage beyond the Beltway. Obama has to make sure he's not blind-sided by it. And those recipients of federal largess at AIG are not helping.
The world--that is, the world of media, blogs, and the Internet--was buzzing on Friday morning about Jon Stewart's take-down of Jim "Mad Money" Cramer the evening before. The smack-down speaks for itself. But toward the end, Stewart made a point that applies to all media, not just the wildcats of cable finance shows.
Cramer was acknowledging that CNBC had aired oodles of interviews during which corporate execs had not told the truth. He insisted that he had been tough on Bush administration Treasury Secretary Hank Paulson and Fed chairman Ben Bernanke. Referring to Paulson, he said,
I've called him a liar...Should we all call them liars? I'm a commentator....It's difficult to have a reporter say I just came from an interview with Hank Paulson and he lied his darn fool head off. It's difficult. I think it challenges the boundaries.
But Stewart was all for pushing such conventional media boundaries:
I am under the assumption--and maybe this is purely ridiculous--but I'm under the assumption that that we don't just take their word at face value, that you actually then go around and try to figure it out.
Meaning figure out if they are telling the truth or not--and, if they are not, you do call them liars.
What's my interest in this slice of the titanic Cramer v. Stewart battle? Well, I once wrote a book immoderately titled, The Lies of George W. Bush. More recently, I wrote a piece noting that the MSM was far too hesitant after 9/11 to call Bush out on his falsehoods--particular on the misrepresentations (or, lies) that greased the way to the Iraq war. That article noted that some MSMers still recoil from the task of branding a politician or government official a truth-teller or liar. Though Stewart concluded this exchange by quipping that he would prefer to be making fart-noise jokes than to be policing financial news networks, it was heartening to see him advance this simple point: if the media doesn't assail leaders (financial or political) who lie, then those leaders can get away with almost anything.
On Wednesday night, Chris Matthews interviewed--make that, skewered--Ari Fleischer on Hardball, grilling him on George W. Bush's legacy: a lousy war in Iraq sold to the public with false information and a lousy economy. At the end of the long segment, Fleischer said
But after September 11, having been hit once, how could we take a chance that Saddam might not strike again?
Strike again? Was Fleischer pushing the canard that Saddam Hussein had been involved in the 9/11 attacks? Matthews was busy closing out the segment and didn't focus on this remark. But after watching the interview later, he decided this comment deserved attention.
Enter former Reagan Pentagon official Frank Gaffney and me. We were invited on Thursday's show to discuss Fleischer's comment and the claim--to which some neocons still cling--that Saddam was in cahoots with the 9/11 mass-murderers. The 9/11 commission said there was no link between Saddam and 9/11, but, yes, Gaffney still contends that Saddam was behind al Qaeda's attack. His evidence? Gaffney cited circumstantial reports, a book by discredited neocon Douglas Feith, and, essentially, his own hunch. Here's what happened: