Barney calls for the torches and pitchforks but wait...

When Edward Liddy, a patriot who not too long ago took on the burden of AIG for $1/year at the request of AIG's board, appeared before a Congressional hearing chaired by Barney Frank, he was excoriated and insulted by members of the committee. When he pointed out that he was new to the job and didn't participate in the award of the contracts that have been such a source of controversy ( and a diversion from the real issues of sending tens of billions to AIG for transfer to European banks such as Deutschebank, Barclaysbank and Societe General--all that we know of at the moment and only a down payment on what AIG might owe its counterparties), he said he took offense at some of the remarks directed at him. One of the brave Congressmen said that he meant to give offense.

Then, Chairman Frank asked for the names of AIG executives who had not volunteered to return their bonuses, Liddy said he was happy to do so but only if he were assured that the names would be held confidential. Frank replied that he was interested in making them public and would subpoena the names if not forthcoming. Liddy then read some threats received by AIG executives and expressed concern that revealing the names publicly would expose them and their families to mob rule and lynching. Frank replied that "he was not persuaded."

Let The Inquisition Start With Frank

By INVESTOR'S BUSINESS DAILY

March 06, 2009

http://www.ibdeditorial.com/IBDArticles.aspx?id=321237362312361

Oversight: Congressman Barney Frank says he wants some of those responsible for our current financial meltdown to be prosecuted. And we couldn't agree more. First up in the court dock: Rep. Barney Frank, D-Mass.

****

And now we have Senator Schumer and others "promising" to tax away the bonuses at the rate of 100% ( the brilliant quantitative addition of Congresswoman Maloney.) We are not lawyers like most of the Congress and so only read the U.S. Constitution as it is written where it specifically bans "bills of attainder" ( and, for the literal-minded, the Supreme Court explicitly included "bills of pains and penalties" ).

http://tinyurl.com/d669j5

The Congress has also come up with the wonderful idea of passing legislation to revoke private contracts after the fact. Now, the administration has already threatened to interfere with the contracts between mortgage holders and mortgagees with little regard for either the Constitution ( which, we suppose, is only what the Supreme Court says it is at any given time, and by a 5:4 vote, at that) or the future of a country where business can't enter into contracts without fear that Congress will modify them whimsically.

One can only wonder what kind of Constitutional Law was taught by Obama and Biden and what kind was learned at the Law Schools that produced so many of our Representatives and Senators. It seems that an MD like Ron Paul knows the Constitution better, or at least has more respect for it.

One can only suspect that this time spent on the bonuses is designed to divert attention from the much greater sum of taxpayer money thrown down the rathole of non-American rats. Now we don't like the idea of AIG bonuses any more than the next person but either Timothy Geithner knew about them or was too incompetent to ask.

That, of course, is the least of the measures of Geithner's incompetence vis a vis AIG, that he was primarily responsible for during the troika's days of awe in the Fall. The vaunted transparency has only just become manifest when it turns out that the rescue of AIG is a near-bottomless pit for the benefit, not of the American financial system, but for the European system ( and, yeah, we are concerned about the world system but later would have been the time to expend American taxpayer money on the problem!) The funds transferred to European banks VIA the bailout of AIG are only a down payment, more like a margin call, with the full downside of AIG's insuring of the profits of hedge funds who shorted the subprime market yet to be seen. That is, the Euro banks wrote CDSs for hedge funds ( that have become enormously profitable for those who bought them against declines in the market for subprime packages ) and hedged their own exposure with AIG's Connecticut subsidiary, the special concern of Connecticut Senator Christopher Dodd.An AIG bankruptcy would jeopardize these Eurobanks and the hedge fund profits ( and a source of funds for Sen. Dodd's campaigns. He has, VERY belatedly, offered to eschew contributions from companies getting bailout funds.)