Think Progress

CNBC’s Larry Kudlow defends corporate greed in debate with TP’s Faiz Shakir.

Last night on CNBC, ThinkProgress editor-in-chief Faiz Shakir debated CNBC host Larry Kudlow about a front-page story in the Wall Street Journal which revealed that the CEOs of banks receiving government bailout money are expensing travel on private jets for personal vacations. “I think it’s great because I want to stimulate the economy,” Kudlow said of taxpayer-funded private jet trips by bank CEOs. “I want to help the resorts. … I’m glad the CEOs are going around. I just wish they’d take me with them.” Faiz responded:

I do have a problem when they’re taking taxpayer money. Larry, you hate paying taxes. I understand that. But if there’s one thing you hate more than paying taxes, it’s seeing those taxpayer dollars go to waste. And that’s what’s going on here.

Watch it:

Shelby tries to blame Obama for bank bailouts that happened ‘last fall.’

This morning on Fox News Sunday, host Chris Wallace asked Sen. Richard Shelby (R-AL) why he believes the Obama administration is “taking us down the road to socialism.” Shelby said it was “obviously” the case, and pointed to last fall’s bank bailouts as the prime example:

WALLACE: Sen. Shelby, you say that the Obama administration is taking us down the road to socialism. Explain.

SHELBY: Well, obviously. So, they intervene last fall in the bank crisis. No one has ever done it on that scale before. Now the automobile crisis.

Shelby seemed to catch himself moments later, saying, “you have to go back to the Bush administration. They started it.” Watch it:

ABC News: GM’s Rick Wagoner will receive a $20 million retirement plan.

ABC News reports that Rick Wagoner, outgoing CEO of General Motors, will be eligible to collect $20 million in retirement benefits from GM, the company that lost tens of billions of dollars under Wagoner’s leadership:

Upon his departure, Wagoner becomes eligible for both a “Salaried Retirement Plan” and an “Executive Retirement Plan” with General Motors. The combined value of the plans at the end of last year was $20.2 million, a GM spokesperson confirmed.

“Most of that will be paid out as an annuity over five years, the remainder is a small lifetime annuity,” said GM spokeswoman Julie M. Gibson.

However, the Washington Post reported this morning that Wagoner would not be leaving GM immediately, “because if he leaves the company he is entitled to a multimillion-dollar pension that the government does not want to pay.” Additionally, under the already-standing TARP agreement between GM and the Treasury Department, GM Is not allowed to pay severence fees to senior executives. “That ban does not appear to apply to retirement benefits, however.”

Liddy: Bernanke and the Federal Reserve approved of bonuses in advance.

Testifying before Congress today, AIG CEO Gordon Edward Liddy said that the Federal Reserve was aware the bonuses would be paid out and “acquiesced in that decision.” In fact, Liddy claimed that Federal Reserve members were present at AIG’s “compensation committee meetings” with the ability to say “yea or nay”:

REP. KANJORSKI (D-PA): Am I to understand that you’re saying that Chairman Bernanke or his designated person at the Federal Reserve was informed that you were going to make these payments and acquiesced in that decision?

LIDDY: Yes, everything we do, we do in partnership with the Federal Reserve. The Federal Reserve is at our board meetings and our compensation committee meetings and our various meetings on strategy and they have the ability to weigh in — either yea or nay — on anything that we decide.

Watch it:

Rep. Mike Castle (R-DE) later asked for clarification on whether the Fed “did not say nay as far as the bonuses were concerned.” Liddy replied that “there was great angst over the payment of these bonuses,” but that the Fed and AIG ultimately decided that “the risk was too great that we would lose all the progress we made if we didn’t pay these bonuses.”

McConnell misleadingly suggests he favored Wall Street salary caps.

This afternoon on CNN, Senate Minority Leader Mitch McConnell (R-KY) pretended as though he had favored capping the salaries of bankers whose firms accepted TARP funds, claiming that his position has been that bailed-out companies “are going to have to operate in a different sort of way.” When host Wolf Blitzer asked whether Congress should have passed salary caps on bailout recipients, McConnell acts as though he had been in favor of such a proposal:

BLITZER: Should the Congress — and you are the leader of the Republicans in the Senate — have passed salary caps on these bailed out companies?

McCONNELL: We certainly had a chance with the amendment by Senator Snowe to prevent this kind of bonuses from being paid. But look, the day-to-day responsibility of oversight of TARP funds is at the Treasury Department.

Watch it:

McConnell is certainly right: Congress did have a chance to pass salary caps. However, he opposed such a move at the time, telling ABC News, “I really don’t want the government to take over these businesses and start telling them everything about what they can do. … We have to resist the temptation to basically dictate to these businesses how to run every aspect of their operation.” On CNN today, McConnell accused AIG of “trying to have it both ways.” Pot, meet kettle.

Grassley clarifies his call for AIG execs to commit suicide: I want ‘contrition,’ ‘remorse,’ ‘full responsibility.’

Angered over the AIG’s decision to dole out bonuses to its top employees, Sen. Chuck Grassley (R-IA) yesterday caused a stir when he suggested the company’s executives should follow “the Japanese example” and resign or kill themselves. Grassley appeared this morning on Bloomberg TV, where he was given a chance to clarify his views. “Of course I don’t want anyone to go commit suicide,” he said. “But I do want some contrition. I want showing of remorse. I have not heard a single apology from a single Wall Street CEO.” He continued:

In the case of the Japanese, you know, they do one of two things. They either go commit suicide or they take a deep bow and say apologies and then sometimes resign. But they take full responsibility. And we’re not hearing that.

And obviously, I don’t want anyone to kill themselves because I don’t believe in that sort of thing. But I do believe that when you have done bad for your company, for your stockholders, and eventually for the taxpayer…you ought to say I’m sorry.

Watch it:

Responding to Grassley’s comments from yesterday, AIG spokesman Nick Ashoosh told MSNBC, “The remark is very disappointing. But AIG’s employees continue to work with poise and professionalism to take care of policyholders and repay taxes.”

Perino claims Bush was responsible for last week’s stock market climb.

Since he was elected, conservatives have been faulting Barack Obama for the collapse in the stock market. But last week, the market posted gains for four straight days. According to former White House Press Secretary Dana Perino, the man most responsible for the stock market’s climb last week was…President Bush. HuffPost’s Sam Stein notes that, on C-Span yesterday morning, Perino offered this explanation:

“You were just speaking earlier about the possibility that since we had a little bit of a better week on Wall Street does that spell a turnaround?” Perino said. “Can all the credit go specifically to President Obama? Well, I would say no. We are just going to have to take a while to let all of this settle down and let the policies that our administration and the new administration are trying to put in place have a chance to work.”

Watch it:

Steve Benen responds, “Putting aside whether watching Wall Street is a useful guide to measuring the strength of economic policies — it clearly isn’t — the point to remember is that positive developments are evidence of Republican wisdom, and negative developments are evidence of Democratic failure.”

Bailed-out AIG doles out $165 million in bonuses.

Insurance giant American International Group, which has received $170 billion in funds from the government to stay afloat, will award about $165 million in employee bonuses. The U.S. government has an 80 percent ownership stake in the company. Treasury Secretary Tim Geithner had urged AIG’s chief Edward Liddy to renegotiate the payments, but Liddy said he had “grave concerns” about the impact on the firm’s ability to retain talented staff. Liddy’s recommendation has “outraged” the Obama administration:

The senior government official, who was not authorized to speak on the record, said the administration was outraged. “It is unacceptable for Wall Street firms receiving government assistance to hand out million-dollar bonuses, while hard-working Americans bear the burden of this economic crisis,” the official said.

The payments “are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation.”

Bailed-out bank eliminated 450 jobs and then spent millions on lavish parties in LA.

Northern Trust received $1.6 billion in bailout funds and announced in December that it was eliminating 450 jobs because “the macroeconomic environment has been extraordinarily difficult.” But as TMZ reports, that hasn’t stopped the bank from spending “a fortune last week in L.A. hosting a series of lavish parties and concerts with famous singers”:

Northern Trust, a Chicago-based bank, sponsored the Northern Trust Open at the Riviera Country Club in L.A. We’re told Northern Trust paid millions to sponsor the PGA event which ended Sunday, but what happened off the golf course is even more shocking.

Northern Trust flew hundreds of clients and employees to L.A. and put many of them up at some of the fanciest and priciest hotels in the city. We’re told more than a hundred people were put up at the Beverly Wilshire in Bev Hills, and another hundred stayed at the Loews Santa Monica Beach Hotel. Still more stayed at the Ritz Carlton in Marina Del Rey and others at Casa Del Mar in Santa Monica.

Northern Trust said in a statement that the parties were funded through “our normal cash flow,” not bailout funds. But lawmakers are having none of it. Sen. John Kerry (D-MA) called it “insulting” and “disgusting.” Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee, said that the bank should “pay the government back for the money it spent.”

Obama to introduce executive pay limits for bailed out companies.

The Obama administration plans to mandate new executive pay limits for financial companies that are receiving any help from the $700 billion bailout fund. “If the taxpayers are helping you, then you’ve got certain responsibilities to not be living high on the hog,” President Obama said in an interview. Sen. Claire McCaskill (D-MO) has proposed that no employee of a bailed-out company can receive more than $400,000 in total compensation until it pays the money back.

Bailed-out Bank of America spent $10 million on Super Bowl party.

Just weeks ago, the federal government extended $20 billion to Bank of America to keep it afloat, bringing its total in federal bailout dollars received to $45 billion. ABC News reports, however, that the bank managed to scrounge up millions of dollars to be an NFL sponsor and for “a five day carnival-like” Super Bowl party just outside the stadium:

The event — known as the NFL Experience — was 850,000 square feet of sports games and interactive entertainment attractions for football fans and was blanketed in Bank of America logos and marketing calls to sign up for football-themed banking products. [...]

The bank refused to tell ABC News how much it is spending as an NFL corporate sponsor, but insiders have put the figure at close to $10 million. The NFL Experience was on top of that and was inked last summer, according to the bank.

The NFL said it was a “multi-million dollar” event and that it was also spending money to put on the event. A Super Bowl insider said the tents alone cost over $800,000.

The Huffington Post notes that this is the latest in a series of bailed-out banks that continue to spend lavishly on sports sponsorships.

Citigroup about to complete purchase of brand new $50 million corporate jet.

The New York Post reports today that Citgroup — the recent recipient of a $45 billion government bailout — is about to receive a brand new $50 million corporate jet:

The French-made luxury jet seats up to 12 in a plush interior with leather seats, sofas and a customizable entertainment center, according to Dassault’s sales literature. … There are just nine of these top-of-the-line models in the United States, with Dassault’s European factory churning out three to four 7Xs a month.

“Why should I help you when what you write will be used to the detriment of our company?” replied Bill McNamee, head of CitiFlight Inc., the subsidiary that manages Citigroup’s corporate fleet, when asked to comment about the new 7X.

Earlier this month, a provision requiring the recipients of TARP funds to give up their corporate jets was stripped from the legislation.

Report: $1.6 billion went to executives at bailed out Wall Street banks last year.

An Associated Press analysis finds that the executives of Wall Street firms that have been bailed out by taxpayer dollars received “$1.6 billion in salaries, bonuses and other benefits” last year. “Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management.” Meanwhile, the AP separately reports that — “after receiving billions in aid from U.S. taxpayers” — the nation’s largest banks can’t provide “specific answers” about how they’re spending the money.

Norquist pens letter to Bush regarding bailouts.

Today, President Bush approved a $17.4 billion emergency loan to America’s ailing domestic auto industry. In response, right-wing ideologue and Americans for Tax Reform president Grover Norquist — who once said he wants to reduce government “to the size where I can drag it into the bathroom and drown it in the bathtub” — penned a letter to Bush with a simple message, “Re: Bailouts“:

Of course, Norquist has never been fond of helping out American workers; he has professed a desire to “crush labor as a political entity” and ultimately “break unions.”