Editorial

Better than sorry

Timothy Geithner is apologizing once again, and it’s not about the taxes he didn’t pay. This time, the United States Treasury Secretary is assuming responsibility for not knowing about $165 million in bonuses paid to AIG executives soon enough.

There is national outrage over the bonuses because AIG has just received $173 billion in bailout funds from the economic stimulus law passed last month. Democrat Senator Chris Dodd inserted a provision capping executive bonuses of companies receiving bailout money, but Treasury officials pressured him to add, at the last minute, an exemption for bonuses agreed to “on or before Feb. 11.” Apparently, the AIG bonuses were agreed to before then. The company’s chief executive, Edward Liddy, said the bonuses were “distasteful… but necessary because of legal obligations.”

“We wanted to make sure it was strong enough to survive legal challenge,” Geithner said about the inserted phrase, even as he claimed he only knew about the “full scale” of the bonus problem last week.

The buck does not stop there. President Barack Obama himself said he was taking full responsibility for the bonus issue but vowed to recoup taxpayers’ money. Obama, who only a few weeks back admitted to “screw[ing] up” in naming people who didn’t pay their taxes to his Cabinet, added that the larger problem was making people know “when enough is enough and understand that their actions have an impact on everybody.”

The recouping effort may have just started. The House of Representative has voted, 328-93, to tax bonuses of employees receiving more than $250,000 annually by 90 percent if their company has received at least $5 billion from the Troubled Asset Relief Program. The Senate is voting next week.

Officials’ apologies for their mistakes or simply assuming responsibility for anything-gone-wrong are comforting, so long as they are not dished out too often. Acknowledgment is a crucial first step in solving any problem or correcting any ill. Still, undoing the effects of gaping mistakes or fatal omissions has proven to be costly—not just for the two-month-old Obama administration but for all leaders out there.

If public officials did not spend so much time doing something they would later say sorry for—and which their political enemies would milk to their utmost advantage—then maybe no crisis, economic or otherwise, would be daunting enough for the people they serve.