Rubin was also an executive at New York-based Citigroup, which Geithner regulated. Or was supposed to regulate. Instead, he helped foster Citi's spending binge and engineered the teetering company's $52 billion federal bailout. This makes the Obama administration's recent protestations about one Citi employee's $100 million compensation package look like the very kind of manufactured outrage of which it incessantly accuses its political opponents.
Geithner also had a hand in the $30 billion Bear Stearns bailout and the multilevel AIG bailouts ($85 billion and $38 billion under President Bush and another $30 billion in March 2009 under Obama). Massive sums of that taxpayer money went to major financial institutions that had employed Obama's moneymen and their closest confidants. Goldman Sachs, for example, raked in nearly $13 billion in December 2009 from AIG in federal TARP funds -- and reported record profits this quarter with a bonus pool of more than $11 billion.
The "solution" isn't to empower a pay czar to curb bonus payouts ex post facto. The solution is to stop dumping billions into failing companies in the first place.
As for private businesses (what's left of them, anyway), this is a teachable moment, to borrow one of the president's favorite phrases. Government strings are like sexually transmitted diseases: They attach forever. If a basket-case company is willing to take bailout money, it will pay an interminable price. The long arm of regulators can and will reach back and open sealed deals and signed contracts on a whim. The Obama campaign chant is the czars' chant, too: "Yes, we can!"
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