Geithner is falling on his sword.

[realitythink]

He's toast.

http://politicalticker.blogs.cnn.com/2009/03/19/geithner-treasury-pushed-for-bonus-loophole/

[tekisui]

1. No he's not.

He is fine and isn't going anywhere. Lawsuits would have followed, and will like follow if and when the new tax code against bailout bonuses is approved.

[Eric J in MN]

7. Someone who sues the government for changing the tax code...

...is unlikely to succeed.

[Pirate Smile]

8. I don't understand why people don't get the argument about the

potential problems if the clause was made retroactive. We would have had a situation where Contract law required one outcome and statutory law required something else. The conflict would have to be decided in the courts. The contracts were made first. Treasury wanted to avoid the issue therefore they must be EVIL or something.

[tekisui]

9. They are just taking the bait.

We are told who to blame, it is just a distraction.

[RoyGBiv]

24. Ding!

You win the pony. :)

[EFerrari]

12. Do you think this is about law suits? I don't.

This is about managing public perception while funneling billions to outfits like Goldman Sachs. The details don't even matter. The flow mustn't be interrupted and the perception has to be managed to that end.

Tim is gone if the media wants him. imo. In a way, that's one of the lesser bad outcomes this bs could have.

[ProSense]

15. Connecticut steps on AIG's contract argument

Connecticut steps on AIG's contract argument

Still, Geitner isn't going anywhere.

[Pirate Smile]

2. No, he's not.

[Larkspur]

3. He should be fired along with Larry Summers

Bothe are Wall Street toadies.

[Eric J in MN]

4. RE: "Geithner said the Treasury Department was particularly concerned"...

..."the government would face lawsuits if bonus contracts were breached."

Congress has the power to nullify contracts.

If someone is under contract to get paid $5/hour, and the federal minimum wage is raised to $6/hour, then the contract is void.

There is a possibility of lawsuits over any law, but the idea that a jury would be so sympathetic to an executive who had been making millions at a bailed-out company that it would side with that executive are slim.

[stillcool]

11. Doesn't the contract need to be re-negotiated?

The employees lawfully received the bonuses. Do you go back and make the employee's pay back what they lawfully earned? If the Unions and the Auto-Industry negotiate a contract, can the Auto-industry decide it paid the workers too much money and demand they pay it back?

[EFerrari]

13. How were those bonuses earned?

[stillcool]

16. Well...last year around Christmas..

one of those electronic corporations went into bankruptcy. They announced the closing of the stores, but offered some employees bonuses to stay on and close the store. After the stores closed the employee's got neither the bonuses or their pay checks. Now, I don't see why those AIG employee's who are closing down their books..or whatever it is, shouldn't get their bonuses either. It is the exorbitant amount that is wrong. But...how do you go back and do a do-over? These executives need to give back those bonuses because they are excessive, and it is the right thing to do. Legally I do not understand how it is possible to 'make them give it back'

[EFerrari]

18. I agree with that and, anyway, it's the people promising bonuses

not the people getting them, that should be docked, imho. :shrug:

[stillcool]

20. Yeah..I don't recall any conversation/debate...

at all about bonuses being part of the bail-out bill.

[Eric J in MN]

22. Two private parties have an obligation to their contract,

...unless a law nullifies the contract.

Example:
Joe works for John for $5/hour and has that in a contract.

Congress raises the minimum wage to $6/hour.

John now has to pay Joe $6/hour.

[stillcool]

23. But say in 6 months..

Congress decides they didn't really want to give John a raise... can they make John pay back every extra dollar he received?

[Eric J in MN]

25. I think that they could legally, but it would be politically unpopular. NT

NT

[stillcool]

26. So..in effect..they could...

make all of us pay back all the money we've made as a result of the last minimum wage increase?

[stillcool]

5. No he's not.

[leftofthedial]

6. "The recession will likely end in 2009, and 2010 will be a year of growth"

Like the last 20 years were a period of "growth."

I can't wait for the screwing I'll get when the next "growth" bubble blows.

[EFerrari]

10. Looks like it. Hard to tell if his offer will be accepted. n/t

[PassingFair]

14. Well it IS his sword....

he should be the one to fall on it.

Dodd should suffer a flesh wound.

[Mike 03]

17. I'm totally confused about why Geithner is the epicenter of this scandal now.

But I think it would be a tragedy if he were sacrificed now, over something like this.

I still am not clear how he has got caught up in this mess after barely
two months in office, when the AIG catastrophe happened months and months ago, when there WAS transparency on the bonuses according to Liddy, who is going to release a list of all the Congresspeople who were apprised of the bonuses as soon as he learned of them way back in December.

There was no effort to hide anything.

I have watched nearly every testimony TG has given and I trust this man. He's obviously overwhelmed but he knows his shit.

He's a million times better than Paulson, and I can't think of anybody more qualified.

How in the hell did this bonus thing end up in HIS lap? Of all people??

[EFerrari]

19. If I have this straight, it's partly because the administration pressed Dodd

to let the bonuses through and then they pretended not to know about them.

In reality, it's more a matter of him being Tres Sec right now. If he can be cut loose to save more damage, he will be.

[renate]

27. I don't understand either

The man is basically in charge of trying to fix the WORLD's economy, and he's supposed to have spent his precious and limited time going over old AIG contracts with a fine-toothed comb? After Congress had handed over $360 billion (or whatever the first part of the package was) with barely a whimper?

Maybe he should have predicted that these dumbasses were going to get bonuses, as per usual Wall Street procedure, which he's well aware of... but again, with his limited time, he probably figured "there are contracts--not worth the legal hassle" and put his energy into fixing everything else.

I feel bad for this guy. He could be making gazillions (maybe not as many gazillions these days as in the past, but still...), and he's voluntarily taking on one of the biggest problems the country has seen in 70 years while being held responsible for doing it perfectly or else get raked over the coals.

[dkofos]

21. Ass first I hope.