Bracing for a Bailout Backlash

[steven johnson]

Source: New York Times

The Obama administration is increasingly concerned about a populist backlash against banks and Wall Street, worried that anger at financial institutions could also end up being directed at Congress and the White House and could complicate President Obama's agenda.

"Never underestimate the capacity of angry populism in times of economic stress," said Robert Reich, a professor of public policy at the University of California, Berkeley, and labor secretary under President Bill Clinton. "A big challenge for President Obama will be to maintain a rational and tactical public discussion in the midst of this severe downturn. The desire for culprits at times like this is strong."

The disclosure that A.I.G., which has received $170 billion in government assistance to remain afloat and avert a cascade of failures in the financial system, is paying bonuses to its executives is the latest in a series of episodes that Mr. Obama's aides said seemed to be feeding a resurgence of public anger.

The public responded angrily to previous disclosures of large bonuses on Wall Street, to auto executives who flew on corporate jets to Washington for Congressional bailout hearings, and to last week's face-off between Jon Stewart of "The Daily Show" and Jim Cramer, the CNBC financial commentator, over the network's reporting on the crisis. "There's unquestionably a strong populist surge out there," said Joel Benenson, Mr. Obama's pollster, citing his own polls and focus groups. "It's been brewing for close to four years. For the last two years, Americans were clearly indicating that they believe that one of the biggest obstacles to progress on America's toughest challenges - notably health care and energy independence - was the influence of special interests and corporate interests on the agenda in Washington."






Read more: http://mobile.nytimes.com/article;jsessionid=8F9903F3D8CA2A4D761B63DD5D1F9016.w6?a=347260&f=19

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Like the war in Iraq, the public has a three year horizon and without success, they will turn on politicians.

So will I.

[depakid]

1. Typical Adam Nagouney garbage- not one single mention of Bush or Republicans

or any semblance of their overriding responsibility -just the usual transparent tact toword making the Democrats look like- or be associated with villians.

Just as he's done for years.

I'm actually very sorry I clicked on this.

[wellst0nev0ter]

2. I Don't Care If He's Democratic, Republican, Or Vulcan

If Obama dicks around on this issue any longer, he'll rightfully have a mess on his hands.

[depakid]

6. This guy's been writing crap about Dems and being manipulative for years- it's like Fox "news"

Rarely ever misses a chance to slant a story. Look 'em up if you can stomach them.

At best, they belong on the editorial page- but, as sometimes happens- there a bit of nepotism involved. So they get special treatment and placement.

[Kolesar]

10. Nagouney over-hyped the "auto execs in private jets" story

It was only a small group of congressmen who got apoplectic about that story.

[remedy1]

3. If Obama doesn't get a handle on this...

...he will be a one term President.

The AIG situation is a disaster.

The administration should have known about the bonus contracts prior to giving them the money. This is very bad, even though the recipients of the bonuses have a legal right to them.

PR disaster for Obama and the Treasury Dept.

[radfringe]

4. public has patience up to a point

It's going to take time to clean up the mess and see some postive results - however the public has patience up to a point.

One of the concerns during the primary/election race was the need to have someone who could hit the ground running. I think Obama has shown he has done that. I'm sure he is also aware of the pressures that will come to bear by 2010 when the mid-term campaigns rev up.

I think your 3-year horizon is too optimistic - if the public turns on politicans (i.e. those currently in office) - it will be next year. At the moment, the repubs are in search of a "message" other than "NO" and this gives the advantage to the Dems.

Obama has talked about "shared sacrifice" - yet we see companies like AIG handing out bonuses or "retention awards". Where's the "shared sacrifice"? Although I doubt any repub plan will actually contain anything which will involve 'shared sacrifice' by the public and corporations alike, they will spin it to seem that way, and more likely attack and blame those who have defaulted on mortgages. (think if this as a variation of the 'welfare queen' spin) The repubs would be providing the public with a target for their anger.

If Obama is to retain public support - he will have to show progress on accountability. That will mean investigations not only into the Wall Street fat cats, but also investigations of bush-cheney.

[lostnotforgotten]

5. I've Lost My Patience - Change? What Change?

eom

[mikehiggins]

7. Oh wow! Obama can't turn around twenty years of problems

in TWO MONTHS???

Betcha it'll turn out he can't walk on water either.

Wow! What a shock.

[Name removed]

11. Deleted message

Message removed by moderator. Click here to review the message board rules.

[radfringe]

9. and that will be part of the repub's message for the 2010 midterms... n/t

[iamthebandfanman]

8. wait

who was president when this all went down?

[spamlet2002]

12. how about some oversight now?