Washington mimics Alice’s Wonderland
Lately, watching Washington DC politicians makes me feel like I’m in Alice’s Wonderland. Congressional representatives are not behaving and speaking like intelligent, rational people. They’re all running around like the cast of characters in Wonderland, irrationally jumping at any idea to make it appear that they actually know what is going on and trying to stay ahead of the public opinion polls as well as protect their own backsides.
I ran into an Indian businessman friend last week and he said something to me that really struck a chord: “This is the first time I’ve ever visited the United States when I feel like you’re acting like an immature democracy.”
You know what he meant: We’re in a once-a-century financial crisis, and yet we’ve actually descended into politics worse than usual. There don’t seem to be any adults at the top — nobody acting larger than the moment, nobody being impelled by anything deeper than the last news cycle. Instead, Congress is slapping together punitive tax laws overnight like some Banana Republic, our president is getting in trouble cracking jokes on Jay Leno comparing his bowling skills to a Special Olympian, and the opposition party is behaving as if its only priority is to deflate President Obama’s popularity.
Speaker Pelosi’s jumping on the bandwagon of populist outrage over the bonuses at AIG initiated a new law that were it to be passed is downright idiotic…and possibly unconstitutional. Congress cannot make any law that affects only one company. Moreover, the unintended consequences may be that no investor or bank or fund will enter into any deals or partnerships with the government. They simply won’t trust Congress not to change the rules of the game in mid-game.
But then, this new bill may be only a smoke screen–a PR game, meant to tell the public: “See, we’ve heard you and we’re taking action.” Pelosi et al may very well know that such a bill would never pass the Senate and be signed into law.
And what have Republicans been doing? Complaining. That’s all. No plans or ideas, just ranting and complaining.
Mr Geithner’s hand was forced by an increasingly hysterical Congress. Charles Grassley, a senior Republican, set the tone by suggesting that AIG executives apologise Japanese-style, first bowing and then perhaps committing suicide. The language was no less salty at a congressional hearing on AIG on March 18th, at which the firm’s chief executive, Edward Liddy, faced a rough ride despite being in the job only a few months and working for a salary of $1.
As the uproar grew, lawmakers began crafting bills that would impose taxes of up to 100% on the bonuses. Andrew Cuomo, New York’s hyperactive attorney-general, entered the fray, slapping subpoenas on the firm and muttering about possible fraud. His office stoked public ire by revealing that 73 employees had received over $1m, and that $57m of its “retention” payments were earmarked for staff it planned to lay off. At the hearing, Mr Liddy said he had asked all those who received more than $100,000 to give back at least half, and that some—no doubt motivated by death threats and the unwelcome attention of paparazzi—had offered to return the full amount. But he also worried that they would leave AIG, making it harder to manage the toxic financial-products business.
It’s easy to understand the populist outrage that’s heard from sea to sea, but the job of Congress is to make good laws, balance the needs of all its citizens, and follow the Constitution. But that doesn’t appear to be the case anymore. Now Congressional members look like–and sound like–the characters in Alice’s Wonderland.