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The Honolulu Advertiser
Posted on: Monday, March 23, 2009

COMMENTARY
Obama can't waste time on no-brainers

By Jules Witcover

For all of President Obama's other early disappointments, none must be more frustrating than the way he was blindsided by news of the $165 million in bonuses paid from the AIG bailout to high-level perpetrators of the financial fiasco.

The failure of the beneficiary firm, or of the Federal Reserve, to get word of the outrageous bonanza to Obama in time to stop it demonstrated a sorry communications lapse and a tin ear on the part of the officials involved.

It's a mystery how they could not have recognized at once how the news would cause a public uproar among taxpayers already aghast at the billions of their money thrown at AIG to rescue it from its own fiduciary excesses and follies.

Instead, embattled Treasury Secretary Tim Geithner was obliged to take another public-relations hit, having to admit he had learned tardily of the scope of the bonuses, and saying at first nothing could be done about them.

Only afterward, he said, did he inform Obama, who finally had to accept responsibility as president and say efforts would be made to recover the bonuses. He had instructed Geithner, he said, to find a way "to block these bonuses and make the American taxpayers whole," but that may be easier said than done.

Edward M. Liddy, the hog for punishment who came out of retirement as head of another insurance company to oversee the AIG rescue for one buck a year, told a House committee he had asked the recipients of bonuses of $100,000 or more to give back half of what they'd received. He said some agreed to return all of it.

But that didn't satisfy the resident congressional bulldog on financial matters, Rep. Barney Frank of Massachusetts. He asked Liddy to cough up the names of the recipients of AIG bonuses, and when Liddy balked out of fear about death threats to some of them, Frank said he would seek committee subpoenas for the names if necessary.

Meanwhile Geithner, who has the misfortune of showing a hang-dog look to the television camera despite his advertised brilliance, continues to pay a perception price for the pre-confirmation disclosure of income-tax problems tardily addressed.

Obama the other day compared him to Alexander Hamilton after the Revolutionary War in terms of the difficulty he faces as treasury secretary, and said he is "making all the right moves in terms of playing a bad hand." Obama said he had "complete confidence" in him and needed the public's support for his efforts.

But that didn't stop vulture-like House Minority Leader John Boehner of Ohio, the designated Republican naysayer on the Obama recovery plan, from warning that Geithner was "on thin ice," and others in Congress from calling for his head.

For all the skill the Obama team showed during the 2008 campaign in reading and responding to public sentiment, it has surprisingly left itself open to public disfavor by misreading it in certain matters. For openers, it chose a man who had tax problems to head the department that is the nation's tax collector. Not gauging the public outrage about the AIG bonuses soon enough was another example.

The embarrassment of several proposed or actual cabinet appointments being pulled back tarnished Obama's early image of confidence and effectiveness. And now there's a growing sense that in the repeated bailouts he may be flying blind into the economic storm.

Only the other day, the administration floated a certain non-starter in proposing as an economy measure that private insurers be billed for certain treatments of combat-injured members of the military. The immediate outcry from military and veterans groups and Congress caused Obama to withdraw the proposal at once.

As the new president faces the huge array of unanticipated problems that greeted him on arrival, he can't afford to have around him people who have a tin ear to what Americans won't tolerate. And he certainly can't afford to have one himself. They expect him to shoot down no-brainers before they happen, and it's up to his subordinates to see that he is able to do so.

Reach Jules Witcover at (Unknown address).

Jules Witcover's latest book, on the Nixon-Agnew relationship, "Very Strange Bedfellows," has just been published by Public Affairs Press. Reach him at juleswitcover@earthlink.net.