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Showing posts from March 19, 2009

Populist backlash may wreck Wall St rescue

Business Times - 20 Mar 2009

NEWS ANALYSIS
Populist backlash may wreck Wall St rescue

By LEON HADAR
IN WASHINGTON

TRADITIONALLY, Americans have admired the rich too much to resent them. But public anger at the way that Washington has handled the bailout of insurance giant American International Group (AIG) now threatens to smash the ambitious and expensive strategy of the Obama administration to revitalise the ailing financial system.

Bonuses of about US$165 million paid out to executives of AIG, which already received more than US$170 billion in emergency federal aid, have seen lawmakers lining up to score populist points.

'We will take this money back by taxing virtually all of it,' said New York Democratic Senator Charles Schumer who took to the floor on Tuesday. 'So let the recipients of these large and unseemly bonuses be warned: If you don't return it on your own, we'll do it for you.'

And Iowa Republican Senator Charles Grassley who proposed on Monday that A…