Out of Control at Treasury

First, AIG spends $400,000 to entertain sales people following an agreement to be bailed out by the US government.  Not illegal but poor leadership.

Second, the SEC issues a report on its supervision of Bear Stearns, a report that is highly critical of the agency.  The redacted version issued to the public deletes many references to the actions of the staff, creating the appearance that the Commission is trying to minimize its role.  Not illegal but poor leadership.

Now Treasury weighs into the poor leadership camp.  Henry Paulson, an alum of Goldman Sachs, appointed Neel Kashkari, another alum of Goldman Sachs, to handle the execution of the bailout.  With plenty of participants already suspicious of Kashkari's ties to the very industry asking to be bailed out, it turns out that he took the opportunity on Sept. 28 to comment on the executive compensation provisions contained in the bailout.   According to the WSJ, he had this to say in a conference call before 800 financial industry players:  "Attempts by Congress to make beneficiaries pay for their mistakes, such as placing caps on executive pay, were 'quite reasonable' and 'a pretty modest hindrance to you,' he told them, according to a recording of the Sept. 28 conference call made public on video-sharing Web site YouTube."

The comments may suggest that Treasury intends to implement the requirements in a manner that will give them few teeth.  It is consistent with Treasury's opposition to inclusion of the provisions in the first instance.  The comments would have been better left unsaid. 

Comments

[Law Student]

This "bailout" is nothing more than a last ditch effort by the Bush Administration to rip American's off of yet another $700 billion a month before leaving office. We are the dopes here though. We should have put up more of a fight. We can of course chose to vote this November, and get rid of Bush and all his buddies.