Spring has come to Washington DC and, with it, the sickly sweet smell of scandal. "Who knew what and when did they know it?" roared the House Republican leader, John Boehner, last week. At the White House's daily briefing, agitated reporters besieged the press secretary, Robert Gibbs, with similar questions: "Has the president been satisfied that he found out about this in a timely manner?" asked one. "Somebody clearly dropped the ball," sniped another. "Let's be fair, let's be fair," Gibbs pleaded, his usual easygoing air morphing into defensiveness.
The topic of these Watergate-like grillings is not sex or lies, but, rather, Wall Street bonuses. Specifically, the now $218m in awards that the reeling insurance giant AIG, which has already accepted $170bn in US taxpayer aid to keep it afloat, with another $30bn to come, was recently revealed to have paid out to a few hundred of its employees.In response, an excitable news media and opportunistic members of Congress spent most of last week in a frenzy of assigning blame and stoking public outrage - never mind that plans to award the bonuses had been known for months. The outcry even threatened to topple Obama's treasury secretary, Timothy Geithner, until the president heartily defended him on national TV.Ultimately, the bonus fury is about much more than a gross payday for a crew of undeserving cretins. In the near-term, it has created a huge and unwelcome distraction for political leaders desperately trying to manage the financial crisis. In the medium term, it threatens to undermine Obama's future flexibility to save the US economy. Above all, it has fuelled a rising populist tide that threatens to swamp Barack Obama's presidency altogether.
