Monday brought yet another report suggesting that the official timeline of Treasury Secretary Tim Geithner's knowledge regarding the AIG bonuses might not really be accurate. The latest story is from the Wall Street Journal, which reports that "senior aides" to Geithner have been dealing with AIG compensation issues, including the bonuses, since this past fall.
The paper doesn't have the proverbial smoking gun proving that Geithner knew more than what he's letting on, and sooner. They do, however, provide quite a bit of circumstantial evidence to suggest it'd be a fairly amazing coincidence if he really didn't know about the bonuses until only recently.
Make no mistake, if the administration is being in any way untruthful about what went on here, it's a real problem. But I'm beginning to be a little baffled by all the attention being given to Geithner's knowledge -- or lack thereof -- about the bonuses, largely because I'm increasingly convinced it wouldn't be such a bad thing if the truth is that he had known about them but just hadn't cared all that much.
Look at the banking industry plan Geithner announced Monday morning, which has an estimated price tag approaching $1 trillion. The $165 million that AIG paid out recently looks like petty cash by comparison. Similarly, the bonuses look like a pretty small issue compared to the enormity of the task involved in fixing the entire world economy. So if Geithner knew about the bonuses and decided he had better things to worry about, I, for one, really won't care that much.
That said, there is one good reason I can think of that Geithner and the rest of the Obama team should have been on the lookout for these kinds of payouts: Politics. The uproar over these bonuses poses a genuine threat to the administration's future plans for the economy, including further bailouts, and in hindsight it's pretty clear that someone should have been on the lookout for potential controversies like this one if only for that reason.