The Center Did Not Hold

A Biden/Obama Balance Sheet


ROBERT EISENBERG


Praise for Robert Eisenberg’s Boychiks in the Hood: Travels in the Hasidic Underground

"Lively and absorbing” —New York Times

"Benefits from author Robert Eisenberg’s high energy level and his engaging personality" —Washington Post

"Insightful and often very funny” —Los Angeles Times

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About the Book

With Joe Biden stepping back into the national scene, the time is ripe for a close assessment of the administration in which he served as vice-president.

The Center Did Not Hold weighs the progressive—and not so progressive—contributions of the Obama-Biden White House across more than a hundred issues involving international relations, domestic cultural and economic matters, and social justice.

While Obama and Biden campaigned in the early 2000s on a host of progressive promises, Eisenberg’s meticulous accounting shows that, over eight years, they failed to achieve any substantial, lasting change to that end, instead perpetuating a tradition of cautious centrism.

Among the disappointments, the former president and vice-president reneged on environmental promises, pandered to lobbyists, prosecuted a record number of whistle-blowers, and failed to implement the simplest of financial reforms in response to the 2008 crisis. Under Biden’s trademark “counterterrorism plus” strategy, they oversaw tens of thousands of civilian deaths in Afghanistan, and escalated violence in the Middle East.

200 pages • Paperback ISBN 978-1-68219-307-5 • E-book ISBN 978-1-68219-253-5

About the Author

Bob

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Robert Mark Eisenberg, born and raised in Omaha, received a BA in political science from Columbia University and an MA in government from Harvard. He earned a law degree from Creighton University, where he later served as a professor. He has also lectured at Harvard and the University of Nebraska. Eisenberg is the author of Boychiks in the Hood, an exploration of contemporary Hasidic culture, described by the New York Times Sunday Book Review as “a rich collection of anecdotes, religious history and thumbnail portraits.” He currently resides in New York City.

Read an Excerpt

AIG

In September 2008, shortly before insurance giant American International Group (AIG) was bailed out by the American taxpayer to the tune of $170 billion—that’s $2,000 for every American family of four—Democratic Vice President nominee Joe Biden expressed his opposition to the idea. “I don’t think they should be bailed out by the federal government,” he said on NBC’s Today Show. A day later, however, Biden changed his position, saying he needed more details. The shift followed a statement by presidential candidate Barack Obama declaring that any arrangement should protect families that counted on the company’s insurance, but not its shareholders or management. “The truth is I don’t know what the bailout is yet,” Biden said in Mansfield, Ohio. “It looks like they’re lending them a little bit of money.”

Only months after receiving the bailout, AIG announced that it was awarding certain executives in its financial products division $165 million in bonuses. It struck a nerve. An outraged New York Attorney General Andrew Cuomo divulged that 73 of these AIG employees were paid more than $1 million each under the plan: “AIG made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees, forcing a taxpayer bailout. Something is deeply wrong with this outcome.”

The announcement, coupled with news that total bonus outlays for AIG key personnel could reach $1.2 billion for the company as a whole, prompted widespread protests. Furious members of the public demonstrated in the streets near AIG’s Connecticut headquarters, prompting a heavier-than-usual police presence, and AIG top executives received death threats.

On March 16, 2009, President Obama spoke out against the bonuses in a statement:

“I want to comment on the news about executive bonuses at A.I.G. This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it’s hard to understand how derivative traders at A.I.G. warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat? In the last six months, A.I.G. has received substantial sums from the U.S. Treasury. I’ve asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole [. . .] This isn’t just a matter of dollars and cents. It’s about our fundamental values. All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules. That is an ethic we must demand. What this situation also underscores is the need for overall financial regulatory reform, so we don’t find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions, so we have greater authority to protect the American taxpayer and our financial system in cases such as this. We will work with Congress to that end.”

Obama talked the progressive talk. He promised to try to use the leverage of the total $182 billion in loans that by then had been handed out by the Treasury Department and Federal Reserve as a means to block the $165 million in extra pay for AIG executives. The $165 million figure was less than one-tenth of 1 percent of the $182 billion lent by the federal government to AIG. But Obama did not succeed, even with leverage of over 1,000-to-1 in his favor.

In the end, the House passed a resolution calling for a 90 percent tax on the bonuses, but the Senate never got around to considering it, despite widespread caterwauling by the public and politicians. The bonus program was never stopped.

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