Jake DeSantis told us what a great job he did at AIG. Apparently, there is some evidence to doubt that. Felix Salmon writes:

Tyler Durden has a scary post up, connecting banks' profitability in January and February to the fact that those were the months when AIG Financial Products was unwinding an enormous number of its contracts en masse. These trades, initiated by AIGFP, were allegedly enormously profitable for the biggest banks in the CDS market[.]

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A question for Brad DeLong and other defenders of the Geithner Plan - any plans to ask this - "We have to ask ourselves: Do we want to revive our economy, or do we want to punish the [auto industry]?”

Why is Wall Street immune to "sacrifice?" Why do Wall Street creditors not have to "recognize that they cannot hold out for the prospect of endless government bailouts[?]"

I repeat again, I do not criticize President Obama's auto industry plan. I do vehemently criticize his free lunch Geithner Plan for Wall Street.

Speaking for me only

President Obama's statement on auto industry bailouts:

What we are asking [from the auto industry] is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. . . .

(Emphasis supplied.) I missed President Obama's speech demanding "painful concessions" from Wall Street. I missed President Obama's condition for Wall Street bailouts that "creditors [must] recognize that they cannot hold out for the prospect of endless government bailouts." Why is President Obama being so easy on Wall Street?

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I have no idea what is stopping them. but some bankers want to give the TARP money back:

There's a growing sense among some bankers that Troubled Asset Relief Program known as "TARP" has become toxic. As a result, they want to bail out of the bank bailout program. . . . [Some] bank executives complain the Treasury's program to stabilize banks during these turbulent times is actually weighing down their potential for growth.

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President Obama will unveil his plan to help the auto industry tomorrow. And General Motors chairman and chief executive G. Richard Wagoner is resigning at his request.

Wagoner's resignation was one of the White House conditions for more federal aid. "He agreed and will do that," a senior administration official said Sunday evening.

Wagoner, 56, joined the company in 1977 and has been chairman and chief executive since 2003.

In related news, Chrysler may have to merge with Italian-owned Fiat. A structured bankruptcy may be in the future for both Chrysler and GM. [More...]

I do not disagree with President Obama's admonitions to the auto industry:

Obama, in an interview with CBS' "Face the Nation" broadcast Sunday, said the companies must do more to receive additional financial aid from the government. "They're not there yet," Obama said.

. . . Obama said the government would require a "set of sacrifices from all parties involved, management, labor, shareholders, creditors, suppliers, dealers. Everybody's gonna have to come to the table and say it's important for us to take serious restructuring steps now in order to preserve a brighter future down the road."

(Emphasis supplied.) Here's my question -- how about some tough words and conditions for Wall Street BEFORE you bail them out, AGAIN, President Obama?

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"Have another hit....of fresh air." (Quicksilver Messenger Service and "Fresh Air" at the closing of the Fillmore in 1971. Here's a version with great audio.)

Cigarette and tobacco taxes go way up Wednesday. Of course, it will hurt the poor and addicted the most. It's also a nanny state move.

You may like it when politicians ban something you hate, but sooner or later they will go after something you like," Reason.tv editor Nick Gillespie says.

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Brad DeLong says:

“We have to ask ourselves: Do we want to revive our economy, or do we want to punish the bankers? . . . I don’t agree that we can do both.”

Punish the bankers? How? By not bailing them out and putting their universe back together again at taxpayer expense? This is sheer sophistry from DeLong. The government could in fact do nothing - not punish the bankers, and let their banks fail. Because that is what many have - failed banks.

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Joe Nocera writes:

Will it work? Isn’t that the only thing that matters at this point?. . . I concluded, somewhat to my surprise, that it might well work. By this, I certainly don’t mean that it will, all by itself, revive the economy. But I think it could put a real floor on the price of the bad assets — critically important to stabilizing the banks — and change the market psychology so that securitized assets can begin to trade again, which is important to get credit flowing. And it will give regulators a far sounder basis to ask Congress for more money to recapitalize banks — or take them over, if it comes to that. . . .

(Emphasis supplied.) What strikes me about this analysis is that Nocera thinks that spending a trillion dollars (the Geithner Plan will cost at least hundreds of billions of dollars) to set the stage for actual policies to fix the problem is a good idea. Frankly, it is an amazing statement. More . . .

Earlier this week, I wrote about Jake DeSantis, who quit AIG after the bonus brouhaha. Mr. DeSantis was upset that because AIG went belly up and was propped up by the government, folks were upset with his million dollar bonus (he stated his AFTER TAX bonus was 750k). Perhaps this story can provide Mr. DeSantis some perspective:

A bankruptcy judge on Tuesday tentatively approved Delphi Corp.'s request to stop paying for health care and life insurance benefits for its retired salaried workers . . . U.S. Bankruptcy Judge Robert Drain in Manhattan ruled that the auto parts supplier has a right to change the retirees' benefits under bankruptcy law and that the cuts are justified given the company's dire finances, its troubles finding financing and the overall state of the automotive industry. "It is crystal clear to me that debtor is well within its business judgment in assuming that it will need to eliminate the projected (post-retirement benefits) liability, which is projected at $1.1 billion, in order to reorganize," Drain said in making his ruling.

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Ezra Klein posits that the Obama Administration is proposing the plans it is proposing on the financial crisis and the economic crisis because it is constrained by Congress:

One of [Obama economic advisor] Laura Tyson's interesting remarks last night came in reply to a questioner who faulted the White House for insufficient ambition. Her response had nothing to do with policy or economics. It was ab[o]ut Congress. "They accomplish what they can accomplish within the realities of the Congress," she shot back. "And the Democratic coalition is breaking already." Critics, she said, need to stop focusing on the White House and begin focusing on Congress. Tyson is pretty plugged in. It's a safe bet that if congressional obstruction has colonized her thinking . . . then it's probably what's obsessing the administration, too.

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Via TPM:

The Wall Street Journal reports (sub. req.) that [NY State AG Andrew] Cuomo plans to subpoena AIG for documents about the credit default swaps that brought the company to its knees.

See also NYTimes ("Members of Congress and the New York State attorney general demanded detailed information Thursday on how tens of billions of taxpayer dollars flowed through the American International Group during its crisis last fall and ended up in the coffers of several dozen big banks, shielding them from losses.") CNBC's Jim Cramer is expected to blast Cuomo for this, via NYTimes:

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