Thoughts from a Yellow Dog Democrat living in Olympia, in the great BLUE state of Washington

I am a liberal because it is the political philosophy of freedom and equality. And I am a progressive because it is the political path to a better future. And I am a Democrat because it is the political party that believes in freedom, equality and progress. -- Digby

Sunday, March 15, 2009

Sanctimony of Contracts

Obama's top economic adviser, Larry Summers, was on This Week today.

George Stephanopoulos asked him
We learned, overnight, that the insurance giant, AIG, which has received $170 billion taxpayer dollars will start paying out today $165 million in employee bonuses. . . a lot of people simply don't understand, how can this be, especially when these bonuses are going to be going to the financial products division of the company which brought the company down?

Summers responded
George, look, there are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous, what that company did, the way it was not regulated; the way no one was watching, what's proved necessary is outrageous.
We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system.

Where is all this concern for contracts when it comes to labor contracts like the UAW? How come mortgage contracts are off limits when they talk about "cram downs"? What about the State of Washington's contract with it's workers on pay raises?

Why are bonuses to folks who bankrupted their company so privileged for this contract protection? I'm sick of this class warfare.

UPDATE 3-16-09
Glenn Greenwald has an excellent post about this today. Also, don't miss Aaron Zelinsky's solution to the problem at Huffington.

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  • At 1:20 AM , Blogger Pro said...

    AIG = Allowing Irreversible Greed.
    AIG = All in Greed.
    AIG = Arn't I Greedy.
    AIG = A$#holes, in general.

    This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the "average joes" taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:

    Not to make excuses for these people, but the bailouts are making crooks out of everyone that touches the money.

  • At 9:41 AM , Anonymous Anonymous said...

    The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.

    Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.

    The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See:


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