There are now serious questions being asked about Treasury Secretary Tim Geithner’s role in the AIG bonus scandal. It is clear now that Geithner knew long before this weekend about the AIG bonuses. Yet, it was not until the bonuses had been handed out – and the resulting public outrage -, that the administration jumped on the Outrage Bandwagon. That outrage does not mask serious questions about when the administration knew, what the administration approved, and why more billions of American taxpayer dollars are going to AIG while these bonus shenanigans are going on.
I would guess that the heat on Geithner will only increase in the coming days and weeks. The administration will have to do something dramatic to change the dynamic. So far, however, this administration has been reluctant to ask Wall Street to sacrifice while preaching sacrifice to increasingly strapped taxpayers. If it stays business as usual, Geithner’s troubles will only increase, as will Obama’s. I think the Democrats and this administration has gone to the outrage well one too many times. The public will want action instead of another Sternly-Worded Letter™.
This is now Barack Obama’s problem, not George W Bush’s.