Conor Clarke

I suggested last night that Carolyn Maloney's idea to introduce an "AIG Taxpayer Protection Act" -- a bill that would tax AIG bonuses at 100% -- would be unconstitutional, and Steve Waldman knocked me around a bit. (You can decide for yourself whether a bill called the "AIG Taxpayer Protection Act" would be sufficiently general to pass constitutional muster, and whether senators who suggest that AIG's employees commit hara-kari have punitive intentions in mind.)… More »

Starting tomorrow, the Seattle Times will be the only daily paper left in the city:The Seattle Post-Intelligencer will roll off the presses for the last time Tuesday. The Hearst Corp. announced Monday that it would stop publishing the 146-year old newspaper, Seattle's oldest business, and cease delivery to more than 117,600 weekday readers.This is obviously bad news, but I'm a little surprised to see it interpreted as a complete catastrophe and not a partial… More »

Noam Scheiber's profile of Larry Summers has been linked around elsewhere and I don't have much to add, except that I thought the MIT yearbook picture of Summers is pretty frightening, and that this anecdote was pretty funny:Even as a young professor, Summers would attempt to restrain his own worst impulses, sometimes in poignantly ham-handed ways. Alan Krueger, an economics professor at Princeton, once earned a rare A-plus on Summers's public-finance exam. [...]… More »

Only one can win. Two theories from the Washington Post:If the bonuses weren't paid, the AIG staffers would be able to sue the company and probably would win, not just what they were owed but also punitive damages that would make the ultimate cost perhaps two to three times as high as the bonuses themselves.Or:Jonathan Macey, a professor at Yale Law School, said it was unlikely that any AIG employees would end up suing the company for changing compensation… More »

It looks like the administration is giving up on getting back the bonuses that AIG has awarded, since the "Treasury has determined there is no way the government can actually extract the money from the individuals who already received the bonus payments," and "would face lawsuits with the potential of significant damage payouts and lawyer fees that could easily exceed the cost of the bonuses." But I don't understand the new plan:[T]he administration said it will… More »

Elise had an interesting observation in the comments yesterday: Congress has restricted the compensation of AIG once already, since compensation limits for any recipient of TARP funds were inserted into the stimulus bill, and AIG has received TARP funds. As far as I know, AIG has followed the letter of the compensation requirements. But will the administration follow them? The compensation restrictions preclude TARP recipients from "paying or accruing any bonus,… More »

Elise had an interesting observation in the comments yesterday: Congress has restricted the compensation of AIG once already, since compensation limits for any recipient of TARP funds were inserted into the stimulus bill, and AIG has received TARP funds. As far as I know, AIG has followed the letter of the compensation requirements. But will the administration follow them? The compensation restrictions preclude TARP recipients from "paying or accruing any bonus,… More »

Representative Carolyn Maloney is considering introducing a bill that taxes back 100% of the AIG bonuses. Representative Maloney might also want to introduce herself to the US Constitution. More »

As Marc and Megan note, Obama has ordered the Treasury to try to block AIG's bonuses. I have no doubt they'll come up with something, since plenty of clever theories for stopping the bonuses are already bouncing around the blogosphere. One writer at the Huffington Post suggests Geithner order the IRS commissioner to challenge AIG's bonuses as "unreasonable compensation." Glenn Greenwald suggests that we look back to the UAW's contractual concessions -- ignoring… More »

Barney Frank has a solution to AIG's apparent contractual obligation to pay bonuses:"Maybe it's time to fire some people," he said. "We can't keep them from getting bonuses but we can keep them from having their jobs. ... In high school, they wouldn't have gotten retention (bonuses), they would have gotten detention."It's worth noting that AIG basically responds to this argument in CEO Edward Liddy's letter (pdf) to Geithner and in the firm's white paper (pdf) on… More »

An editorial over the weekend in the Wall Street Journal pointed me towards a topic I hadn't noticed before: state-by-state tax credits for the film industry. New York is considering scrapping its 35% tax credit for films shot in the city to help close the state's budget gap. To which 30 Rock's Alec Baldwin, ever a paragon of verbal restraint, responded: "if these tax breaks are not reinstated into the budget, film production in this town is going to collapse." My… More »

After some enjoyable arguments in the comments section, I have been trying to bone up on AIG's bonus situation. First, I clicked over to an ABC story entitled "Summers: AIG Bonus Bombshell 'Outrageous,'" expecting to find a story in which -- well, in which Larry Summers denounces the AIG bonuses as an outrage. Instead, I find Summers saying:What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is… More »

There is a lot of fuss over the fact that AIG is paying millions in bonuses while receiving billions in bailout, but I'm not sure I understand the commotion. Or at least I still want much more information. Here are the big facts thus far (drawn loosely from the Times, Post and Journal): More »

I worried about it this morning. Now one White House official tells the Atlantic:The rules are on how federal money is spent by the states. Put another way, the rules concern what sort of state and local projects we will fund under the Recovery Act. The enforcement is that we won't fund projects that don't meet the standard.This is obviously possible for a huge amount of grant money (though I'd like some more details), but I'm not sure it's the same as what Obama… More »

I worried about it this morning. Now one White House official tells the Atlantic:The rules are on how federal money is spent by the states. Put another way, the rules concern what sort of state and local projects we will fund under the Recovery Act. The enforcement is that we won't fund projects that don't meet the standard.This is obviously possible for a huge amount of grant money (though I'd like some more details), but I'm not sure it's the same as what Obama… More »

I wrote up some notes about Larry Summers' Brookings speech over at the Business Channel, but I wanted to highlight his comments about Timothy Geithner. He was asked the first question by Martin Neil Baily, who pursued two concerns: Shouldn't solving the problems in finance sector be the administration's top priority? And is there some hesitation about coming up with a plan for action? Summers first responded by noting that it's possible to work on more than one… More »

I've posted a link to the audio under What We're Reading -- I'm hoping "reading" can be loosely and temporarily interpreted to mean "listening" -- but now that I've got the full text of Larry Summers' speech at Brookings, I'll put it at the end of this post.A couple of quick points about the speech. First, Summers seemed pretty upbeat about the economy. Most of the administration's previous public statements about the economy emphasize that recovery isn't a gravy… More »

The war between CNBC and Comedy Central, which began with Rick Sanelli's rant and spiraled into an exchange of on-air aspersions between Jon Stewart and Jim Cramer, ended last night when Cramer appeared on The Daily Show. You can watch the clips here.It starts off looking like the proceedings of a truth and reconciliation commission. ("How did we come to this?" Stewart asks. "They're not losers, they're fighters," Cramer says of the mortgage-burdened homeowners.)… More »

Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. "If we see money being misspent, we're going to put a stop to it," Obama told a gathering of state officials at the White House. How? Obama says "we will call it out and we will publicize it." Biden, meanwhile, scolded: "If we don't get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states."If this counts as accountability,… More »

Obama and Biden both gave stern warnings yesterday about misuse of stimulus funds. "If we see money being misspent, we're going to put a stop to it," Obama told a gathering of state officials at the White House. How? Obama says "we will call it out and we will publicize it." Biden, meanwhile, scolded: "If we don't get this right, folks, this is the end of the opportunity to convince Congress that anything should go to the states."If this counts as accountability,… More »