The House Financial Committee had a hearing today with Treasury Sec. Tim Geithner, Fed Chairman Ben Bernanke, and President of the NY Fed William Dudley (who was barely asked anything).
I didn't get much out of the hearing other than this. The structure of these hearings is completely broken. There are 75 members of the committee and they each get 5 minutes time. Chairman Frank (D-MA) was good about limiting the time, but still that's would be 6.25 hours. And on a topic like this, everyone wants their 5 minutes for a sound bite and to be able to tell their constituents they were rough on Geithner and Bernanke. They also alternate, first a Democrat then a Republican. So there is no momentum built up in the questioning. The 5 minutes includes the reply from the witnesses and the representatives can cut off the witness. As such they ask complex questions and demand yes/no answers even when not appropriate; this lets them maximize their tough talk. There's no opportunity for complex issues to be explored in any way.
The committee should be made smaller, or if that's not possible, they should cut off questioning to a smaller group selected by seniority or random drawing or round robin list across hearings. Also, questioners should group according to topic. All those that want to explore the AIG issue should ask questions at once and then later representatives could build on previous questions instead of having to waste time setting context.
Apparently 15 of the top 20 AIG bonus receivers have agreed to return their bonuses. For all the talk of breaking contracts and specific taxes at 90%, it turns out asking works pretty well. Of course that's in the environment of outrage. Now we get to be outraged about the other 5 (and I don't know about the rest) of the recipients.
4 comments:
Thanks for the update.
Your analysis of this congressional hearing is spot on. No real value, except to the politicians who are generating sounds bites for the next election back home.
Unfotunately, congressional hearings like this also seem to serve the same function that Circuses did in ancient Rome....keep the citizens entertained and uninformed.
As far as asking for the bonus money back being a successful approach, it definitely helps helps when the persons asking are the Attorneys General of New York and Connecticut. Somehow, I don't really think it was a "I should do the right thing moment" as much as it was, well say....an "I don't want to piss off this AG guy with major subpoena power" kind of moment.
Funny how the initial public outrage didn't seem to elicit much of reaction from these AIG execs at all. I don't recall a single one stepping forward and saying, "this is wrong and I don't deserve this money". It wasn't until the prosecutors got involved that anything happened. Seems they (the execs) may actually fear, at least a little, other people with investigative and prosecutorial power.
As far as the "rest of the recipients" are concerned, I believe that most of them are based in London, and as such, are completely out of the reach of the NY and Conn Attoneys General. I think we can all see how fast the London execs have returned their bonuses. To my knowledge, not a single London bonus has been returned yet. So much for public outrage being a motivating factor.
Thanks for providing this "forum" for discussion (now that I have already invoked the Roman empire).
TT
The most complete stats I've seen on the bonuses are here. I don't know how many of the recipients are outside of the US but it's about half of the total bonus money.
Liddy testified last week he asked for the bonuses back, so I don't know when people complied in comparison to when AG's got involved.
I'd like to see AGIFP London bonus people denied entry into the U.S. in perpituity. People shouldn't expect to visit the house they got caught robbing.
It's not clear that all the "bonus people" were "robbing". It's also an assumption that they'd ever want to visit the US.
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