In April, 1961, the new, young, president, John F. Kennedy, in response to bad advice, reflecting bad planning and bad faith, authorized an invasion of Cuba to proceed. It had been in the works for more than a year, driven by the CIA and the Cuban exile community.
We all know the results. The invasion force at the Bay of Pigs was quickly surrounded and forced to surrender, with many captured. Negotiations for return of prisoners dragged on, keeping the event in the news for another year or more. The fate of the captured Cubans was in the news constantly. Jack Paar regularly featured the issue on his television show. 47 years later, it’s hard to realize what a huge issue this was. Some commentators have linked the subsequent Cuban Missile Crisis of October, 1962 to the disorganization and incompetence shown by the U.S. the previous April.
Long-time CIA Director Allen Dulles, CIA Deputy Director Charles Cabell, and Deputy Director for Plans Richard Bissell were all forced to resign. But lessons learned by the Kennedy crew remain elusive. More interaction with the Soviets was advocated only after the near-catastrophe of October, 1962. Kennedy has been portrayed as being more wary of advice from the military, but there is abundant evidence that the CIA continued its black-bag operations. And the Cold War went on apace. And the Kennedy team squared its shoulders and soldiered on-literally, into Vietnam.
The firestorm over the AIG bonuses has important points of contact. The new, young, president, Barack Obama, in response to bad advice, reflecting bad planning and bad faith (or bad economics), authorized the bailout of the American Insurance Group, now at $175 billion. There was no “transparency” in the decision. Where the money went was not revealed until now with the clamor at ear-splitting levels.
The U.S. government now owns 80% of AIG. And, as we all now know, AIG executives are to receive $165 million in “performance” bonuses. It seems as if the U.S. government is a captive of AIG. But the AIG bailout and bonuses are but one part of an emerging story. As Robert Kuttner writes ” …the outrage over the AIG bonuses is a sideshow. The larger problem, both financially and politically, is the entire strategy for rescuing the banks.”
This seems to be one of those defining moments historians write about. Is anyone going resign? Is anyone going to be fired? Are any policies going to be changed? The AIG bonuses may, as Kuttner suggests, be a sideshow of a larger problem, but it is a “sideshow” that will persist in the public consciousness for years. And at a political cost that is gigantic.
You seem to have swapped the “m” and “b” in your title. I think you mean Obama not Omaha or Omaba.
Why is Obama’s team so afraid of the type of solution proposed by Kuttner?
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p>I think they are worried about the perception that they are “nationalizing” or “socializing” the banks. That maybe this perception will galvanize opposition to the rest of their program.
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p>But it seems to me that the constant begging and cajoling of the market to solve the problem is not only not working but its causing the same opposition. People, instead of critizing Obama for being a socialist, are criticizing him for letting the greedy bankers get away with it. For not “getting it” about how ordinary people feel.
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p>The Republicans end up looking like the populists (although not the ones on this site, who seem to be quite defensive of AIG’s bonuses). And the Democrats look like they are, yet again, wasting tax payers money. Worrying too much about appearing “market-oriented” may be causing more problems than it is solving.