WASHINGTON - President Obama is facing growing liberal anger over his handling of the economy,
with prominent voices on the left voicing concerns that taxpayer-funded
bailouts are enriching corporate America while doing little to right
the nation's economic ship.
The revelation over the weekend of massive bonuses being awarded to employees of AIG -- despite repeated federal bailouts engineered by the Obama and Bush administration -- is igniting fresh outrage among liberal lawmakers and bloggers.
Several prominent Democrats are pointing out that Obama aides
were more than willing to press auto workers to renegotiate contracts
as a condition of bailouts for car companies -- but are now citing the
sanctity of contracts in AIG bonuses, saying they can't be canceled.
"People have no confidence in what's happening right now," Jane Hamsher, the founder of the liberal blog FireDogLake, said Monday on ABC NewsNOW's "Politics Live."
"People on the right and the left are looking at all this money
being shoveled to banks [by] friends of Timothy Geithner and Larry
Summers ... and they're not seeing any accountability," she added.
"They don't know where the money's going, they don't know how much is
gone, and it's all nontransparent and extremely suspicious."
Hamsher is organizing an online petition drive to press lawmakers to block further bank bailout funds. The Obama administration has signaled that it anticipates needing more funds to stabilize the nation's banking system.
A group of nearly 80 House Democrats took the unusual step of
publicly sending a letter to Treasury Secretary Tim Geithner on Monday,
calling on him to block AIG's bonus payments.
"These kinds of abuses of the public trust will only threaten
any future efforts by President Obama's Administration to intervene in
the financial markets," they wrote.
Allowing the payments to go through would leave the president in a difficult political spot.
"He's walking down a very, very dangerous path right now,"
liberal activist and author David Sirota told ABCNews.com. "It betrays
the exact problem that people are angry at -- that there's one set of
rules for Wall Street and Washington and another set of rules for
"It's becoming real, what the difference is between Obama's
rhetoric about power coming from outside of Washington, and the reality
of an administration filled with Washington and Wall Street insiders,"
Obama Lashes Out at AIG
The president sought to acknowledge the anger over AIG by voicing outrage of his own. Obama promised today to "pursue every single legal avenue to block these bonuses.
"Under these circumstances, it's hard to understand how
derivative traders at AIG warranted any bonuses, much less $165 million
in extra pay. Now, how do they justify this outrage to the taxpayers
who are keeping the company afloat?" Obama said.
Treasury Secretary Timothy Geithner has been working since last
week to scale back or cancel the bonuses. But the fact that he failed
to stop AIG from proceeding with the bonuses left some prominent
Robert Reich, who was former President Clinton's labor
secretary, called it a "scandal" that "Americans still have so little
say over what is happening with our money."
"When our very own secretary of the Treasury cannot make stick
his decision that AIG's bonuses should not be paid, only one conclusion
can be drawn: AIG is accountable to no one. Our democracy is seriously
broken," Reich wrote in a Huffington Post op-ed.
Democratic lawmakers joined Republicans in expressing outrage. They
called on the president to do more to protect taxpayer dollars.
"The American people are being played for fools by AIG," Rep.
Elijah Cummings, D-Md., said today on ABC's "Good Morning America."
Polls suggest that the public continues to have faith in
Obama's capacity to manage the economy. A CNN poll released today found
59 percent of respondents approve of the president's handling of the
But a Pew Research Center poll also released today
showed Obama's job approval rating slipping a bit, down to 59 percent
from 64 percent a month ago. The dominant issue on the public's mind
remains the economy.
The new concerns reflect the fact that, with every passing day,
ownership of the crisis is being shifted more and more to the
The president and his top advisers continue to point out
that the economic mess began on President Bush's watch. But they won't
be able to point the finger backward indefinitely, said Kevin Madden, a
Republican political consultant.
"Outrage will soon be an overvalued commodity for President
Obama," Madden said. "In order to fix the economy he is going to have
to execute some tough decisions that aren't popular with a fatigued and
anxious public. It's a big test."
Hamsher, of FireDogLake, said she can't imagine Congress
granting more money for Obama administration strategies to shore up the
financial system until the president proves that he and his team can be
"There is no public confidence in the process, and until you
can restore that confidence, I think you're just lighting money on
fire," she said. "I don't think there's any question right now that
until they restore some confidence in the system, no one's going to
give them that money, and I don't think that's a Democratic or a
Republican consideration. I think that everybody feels that way this
Sirota said that the administration's current course could permanently harm his credibility.
"This idea that he is committed to pushing more bailouts -- if
he steps into that breach, he is opening himself and the administration
up to suddenly becoming part of the problem, not part of the solution,"