When And What They Should Have Known

There is a major piece missing from your puzzle Mikey. Its not just about when they knew bonuses were coming. Its about knowing when they knew HOW MUCH the bonuses were going to be. Elijah Cummings was on top of the story but he wasn't going after the FP bonuses as much as he was investigating bonuses that Liddy himself had signed off on after becoming CEO. Thats another story that you aren't reporting that is probably a bigger one. There is 1 billion dollars in a bonus pool for workers in other sections of AIG that Liddy himself was party to.
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Now the truth is while these bonuses are an outrage getting them back will do nothing, absolutely nothing, to help stabilize AIG. Nor would getting bonus money back from Wall Street help to stabilize the big banks. Its a story and people are genuinely pissed off but Geitner's real job is a lot more macro than the bonuses. Thats the truth of the situation whether anybody wants to notice or not. His job shouldn't be to negotiate bonuses, thats what Liddy was installed to do. If anyone needs to be fired its him and any other CEO still handing out bonuses after getting TARP money. It is what it is.

OK, I know about this one.
Are there any other stories out there?

TIME's Massimo Calabresi has reported
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Thanks for saving me the trouble of actually following the link.

"Are there any other stories out there?"
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Here ya go.
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The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution
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http://www.rollingstone.com/politics/story/26793903/the_big_takeover/8

Geithner: Gotta go. Now.
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There is a practical benefit to punishing the Obama-Geithner braintrust for the bonus fiasco. The sooner Obama realizes that defending the Wall Street pirates is going to have significant and lasting political impact, the sooner he may change course and bring it some sane advisors.
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Query: Which young President was more poorly advised by his genius advisors? Kennedy on Vietnam or Obama on bailing out Wall Street.

Michael Scherer:
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TIME's Massimo Calabresi has reported...
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Here's what Massimo Calabresi has "reported":
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...a Federal Reserve source tells TIME...
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That's not reporting, that's being a conduit for gossip.
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Your post should really read "Somebody who wasn't willing to put their names to their claims told Massimo Calabresi while he was digging for dirt..."
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Somewhere along the line, communications broke down.
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Somewhere along the line, giving interested parties accountability-free anonymity and a platform for uncritical stenography of whatever those interested parties say resulted in nobody actually knowing anything about anything, Michael Scherer.
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I guess we just have to hope that muddied waters don't help the bad guys in this, whoever they are. It's not like the press corps exists to clarify anything.

The danger we face is doing more damage to solve the problem than the problem itself causes. The bonuses are a symptom of the problem, not the problem itself. It's certainly appropriate to figure out who effed up on the blindsiding of the administration, but the whole effort is inflating the importance of this episode over the larger systemic problems we face.
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Less finger pointing and more historical research would seem to be the order of the day.

Here's Krugman's take:
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I'll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it's part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.

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He'll leave it to "others" because it's largely beside the point.
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Geithner and Summers are still pretending that we can all just forget about what happened, and go back to (their) business as usual. While they keep shoveling money into a furnace, and the deficit climbs toward $3 trillion, and still banks don't make the kind of loans necessary to keep a non-bubble economy growing, that's not going to happen.
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It's not that they don't know what they are doing, it's that they know exactly what they are doing, but Geithner and Summers are sadly wrong --Rumsfeld kind of wrong.

I will quote this post from this morning's Great Orange Satan:

"Question
by Jed Lewison

If the mainstream media had put 10% of the effort into investigating Bush Administration claims of WMD as they are into the claims that Tim Geithner and/or Chris Dodd facilitated the AIG bailout bonuses, what are the chances we would have gone to war in Iraq?"

http://www.dailykos.com/storyonly/2009/3/19/710791/-Question

"At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis"
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And that is the very reason why Geithner is the absoultely wrong person for this job. Its not because he does not know what he is doing. He knows perfectly well what he is doing. He is soley focus on perserving the way of life of the elites that got us where we are today.

SG--here we agree most strongly. I don't want my treasury secretary involved in something as trivial as bonuses. With the whole world going to hell in a hand basket could we let him stay focused on keeping us from running off the road.
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I know the bonuses are appalling but in the grand scheme of things they are such a small percentage of the monies we have at stake I want Geitner to keep his eyes on the ball. Let's face it, the only reason we are focused on the bonuses in the first place is because it's the only part of this crisis the media and most of Congress for that matter can understand.

reposted from the other thread.
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I have a question for those who are in favor of nationalization. Where will we get the money to do it? Especially in light of the report earlier this week that the FDIC reserves are low because of a dumb ass decision in 1996. Are we going to borrow money to give banks so they can lend it out? And if so isn't that much the same thing they were doing when the house of cards came tumbling down? Hey I am all for doing something to get the banks back to working but I am not sold on nationalization primarily because of the costs. So if someone can explain to me where we would get the money to nationalize the big banks I am open to hearing you out.

I know the bonuses are appalling but in the grand scheme of things they are such a small percentage of the monies we have at stake I want Geitner to keep his eyes on the ball.
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Dee, you seem to be completely missing the point. People aren't merely upset because of the money (although I find it laughable that saving a few hundred million dollars for taxpayers is somehow beneath the paygrade of the Secretary of the Treasury).
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People care because Geithner's behavior vis a vis the bonuses gives us tremendous insight into his attitude regarding the entire crisis. Guess what? Geithner wasn't oblivious to the bonuses because he was busy keeping his eye on the ball. He DOESN'T have his eye on the bal. That is the problem. The bonuses are the canary in the coal mine that tells us that the Treasury Department is a toxic environment.
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Geithner should be fired yesterday. Obama should reverse course immediately. Obama should put together an expert team of economists that have as much independence as possible from the Fed, Goldman, AIG, etc. The simple question should be "how much of the CDS market can be flat-out allowed to fail without pulling down the rest of the World's economy? And what other governmental actions (e.g. direct lending by the government; TARP-like funds to solvent, responsible banks; increased stimulus spending) are necessary to allow the gamblers to take their losses without killing the rest of us.
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If we absolutely must bail out foreign banks, etc., I would suggest that Obama be completely forthright with the public about it, demand commensurate funding by foreign governments, and insure that the terms that we receive are the absolutely most favorable terms possible to negotiate (Since the alternative for the bankers is "the world plunges into chaos and we hand out pitchforks to the mob," I expect favorable terms could be agreed upon.

sqr1, these bonuses are like 1/10000 of the money we gave the company. I don't want Geithner approving every purchase the company makes.
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Posted around here yesterday:
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"Same thing with AIG. The controversy that gets discussed is less expensive and less important than the bigger picture-- how'd this happen, why are the same ppl there, and where has the free money we've given them in lieu of bankruptcy gone? I don't mean to criticize this post-- nothin' wrong with this sort of thing on a blog, and I didn't know about the hot dogs or the renovations. But the larger coverage isn't much more penetrating than this, unfortunately."
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Wow, that guy sure is prescient!
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Hey, have you heard that there's lots of really important stuff going on, but the money-hemorrhaging print media is failing to inform people about it in favor of focusing on comparatively trivial shiny-object bullsh*t?
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OMG IT'S A SCANDAL!!! Someone get Massimo Calabresi to report on it!

"...Geithner is the absoultely wrong person for this job. Its not because he does not know what he is doing. He knows perfectly well what he is doing. He is soley focus on perserving the way of life of the elites that got us where we are today."
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I'm pretty sure that's why they picked him.
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And Krugman has it exactly right. The smart question is whether they should have seen that "the bonus firestorm was coming". From a practical/policy standpoint, it's meaningless. At least compared all the other malfeasance and fraud.

"I have complete confidence in Tim Geithner and my entire economic team," Obama said. "Nobody is working harder than this guy. He is making all the right moves in terms of playing a bad hand."
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Heck of a job, Timmy.
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Wake up, Barack.

SG:
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So if someone can explain to me where we would get the money to nationalize the big banks I am open to hearing you out.
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The argument is that it will cost less than what it's costing now.
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"Where we would get the money" is the same place we're "getting the money" to hand over to AIG --so that AIG can take half of it and give it to the financial products divisions of US banks.
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Country---------AIG-related payments in billions of dollars
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US--------------43.5
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France----------19.1
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Germany---------16.7
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UK--------------12.7
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Switzerland-----5.4
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Netherlands-----2.3
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Canada----------1.1
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Spain-----------0.3
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Denmark---------0.2
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Total----------$101.3 billion
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Total to US counterparties: $43.5 billion
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Total to non-US counterparties: $57.8 billion

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Makes sense, SG?
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The problem is that we keep handing hundreds and hundreds of billions of dollars over to these institutions, and these corporations keep doing what they normally do with money, i.e. protect their own balance sheets, shield their stockholders from whatever losses they can, and resume business-as-usual buying and selling of financial products --none of which solves any of our economy's problems, and all of which require much, much more money than Treasure has asked for so far. Plus, the elites who were incompetent enough to crash the Titanic are still at the helm directing their families into First Class lifeboats. We simply can't afford to leave people in charge whose first concern is the preservation of a system that leaves themselves unexposed to financial losses, instead of what doing what works to get money flowing into productive hands.
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The question isn't "Where are we going to get the money to nationalize banks and securities insurers?", SG, it's "Where are we going to get the money if we don't nationalize banks and securities insurers?"

No it actually doesn't make sense SZ because as I said to you before we HAVE effectively nationalized AIG. Liddy was hand picked by Bush to lead AIG and the leadership that was there was fired and we own 80% of the company. Yet we have still dumbed 170 billion in, by far more than any bank, and they just posted the biggest loss in US history. Now if you are saying we can dump anywhere near that same amount of money into the banking system I am calling bullsh*t. You just made the case AGAINST nationalization when you really think about it.

OMG IT'S A SCANDAL!!!
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It's politics. Did you think our political press was going to cover anything substantial about AIG's undercapitalized reinsurance contracts or the systemic risks posed by their life insurance business? You know, the sort of knowledge citizens might find useful while participating in a 21st Century democracy. Fagetaboutit.

sqr1, these bonuses are like 1/10000 of the money we gave the company. I don't want Geithner approving every purchase the company makes.
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If your point is simply that it is more important to find out how and where the money is spent, I completely agree.
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And if your point is that SOME PEOPLE, particularly Republicans, are happy to let Democrats battle between Dodd an Geithner as to who is responsible for the bonuses, in order to distract from the larger issues, I also agree.
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But if your point is that this is, in fact, unimportant, I couldn't disagree more. AIG is an epicenter for the entire financial crisis. It is of paramount concern to determine who, if anyone, at AIGFP is absolutely essential to retain to wind down the business. Who has key information necessary to fixing the situation? Who is hopelessly compromised? Who may have funneled money offshore? Who should be prosecuted? Who must be kept from moving to AIGs counterparties? Who can and would use information obtained at AIG to engage in possibly illegal trades that might further destabilize the economy?
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Tim Geithner's statements tell me that -- at best! -- he couldn't care less about any of the above questions.
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Again, the bonus issue is the canary in the coal mine. When the canary dies, the coal miners don't say, "Who cares? The canary is only worth 1/10000000 of the coal in the mine."

SZ
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Question: In theory what could Geitner have done to stop the bonuses?

Michael Scherer:
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Thank you very much for responding to commentary; it is greatly appreciated.
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Massimo's Fed source gave information that was subsequently confirmed by Treasury
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I'm sorry, I've re-read the thing twenty times, and I still can't find the name of anybody at Treasury who confirmed anything.
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Massimo mentions something about "A Treasury Department source, speaking on background, confirmed the e-mail memo...", but that's getting another anonymous person to confirm something claimed by the first one.
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Why is the "Treasury Department Source" on background? Why is this person's testimony believable in the slightest?
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This un-named, unaccountable "source" goes on to...you guessed it: blame underlings!
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"The Treasury Department official says the fault appears to lie with career staffers at the department who failed to report the imminent bonus deadline up the chain to Geithner. "
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Oh, really? Why is that any more believable?
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"This failure may be a by-product of the difficulty Geithner has had staffing up at Treasury."
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It "may be", or it "may be" that it's related to something entirely different, or that it isn't the case at all. Did Massimo do something to independently confirm anything that these people said other than checking with some different people? Why didn't Massimo actually provide contents of both the Feb. 28 memo and the March 9 memo? Has he actually seen these documents? Does he know personally that they exist? More importantly, do we know? We're not dealing in probabilities here --either we do or do not know that things are the case. Writing about what we do know is reporting; writing about what un-named people say about the contents of documents that may or may not exist is not reporting. How is this sort of piece not the height of irresponsibility? Do they teach you in J-school that this is the kind of work is what you should aspire to produce?
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J-school standards aside, it seems that your threshold for believability is in Clarence the Angel talking to George Bailey-ville, instead of Dashiell Hammet-burg. For somebody as hard-boiled as yourself, it's surprising how much faith you have in the credibility of other human beings, i.e. other reporters.
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Your standards with respect to the credibility of these participants seem incredibly low, Michael Scherer, for somebody who seems as savvy as you appear to be. Until we all get to read names and see memos, none of this is reporting; all of it is the uncritical stenography of gossip.

Sorry, that should read "Do they teach you in J-school that this is the kind of work that you should aspire to produce?"

SG:
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Question: In theory what could Geitner have done to stop the bonuses?
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...we HAVE effectively nationalized AIG. Liddy was hand picked by Bush to lead AIG and the leadership that was there was fired and we own 80% of the company.
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Well, according to your theory, SG, Geithner could have stopped the bonuses at any time, since we "effectively nationalized" AIG.
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...Or perhaps your definition of "effective" is different than mine.
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Either one or the other is the case, SG.
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Either we "HAVE nationalized", in which case Geithner is in total control of AIG down to its bonus payments, or we have not actually nationalized the firm, in which case there is nothing that Geithner can really do about how AIG spends its money, except perhaps to let Congress try to legislate executive management month in and month out --which is my point.