Yesterday, Obama economic advisor Larry Summers was making the rounds of talk show and news circuits defending the AIG bonuses: "We are a country of laws. There are contracts,' Summers said yesterday. 'The government cannot just abrogate contracts..." Really? Come on, Larry.
The government is not only breaking contracts in the worst economic crisis since the Depression; it is very likely that the only way out of this economic crisis is to break a lot more contracts. Homeowner mortgage contracts are being broken. Corporate obligations are being broken. And the biggest problem of all-- how to eliminate the hundreds of trillions of synthetic derivatives untethered to any real underlying assets-- will require large scale elimination of contracts. We're not getting the full story, because the Obama administration feels it is necessary to parcel out the truth.
The reality-- appearing more on blogs than in the news-- is that if AIG lost its key executives there would be no one left who understands what these "contracts" mean in the first place. It is why Paulson before Geithner had to pull in talent from Goldman Sachs and other firms that are booking both bailout funds for "capital base" and "profits" as counterparties to transactions like credit default swaps. But it doesn't follow that any executives touching public moneys need to be paid anything other than a simple wage. After all, they are fortunate they have jobs whose compensation isn't metered out in cigarettes. For that, blame Congress and the elimination and suppression of regulations and criminal penalties tied to financial and economic crimes.
4 comments:
I have no debts. Do I get a bonus?
I guess it is ok to break the UAW contract but not these contracts.
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: http://www.facebook.com/group.php?gid=67594690498&ref=ts
The question I have is - what if they hadn't been bailed out - would they have been able to give bonuses?
My brain tells me that there is NO WAY they "should" have been able to give bonuses without the government money - but my gut tells me that the corrupt executives would have found a way to go out with a bang and steal whatever cash liquidity they had left just prior to taking the company under.
Post a Comment