I don't practice law anymore, but after having contract law in my head for over 15 years, there are still a few tidbits bouncing around in there. Maybe I'd be better off if that wasn't the case, because then this whole crapola story about AIG not being able to get out of paying $165 million in bonuses to its employees wouldn't keep me up at night.
As a recovering attorney, I know full well people break contracts every day -- that's why lawyers have jobs! It's not a question of whether you can break the deal or not, it's a matter of whether one is prepared to live with the consequences of breaching a contract. So if AIG just said, "We know we agreed under other circumstances that we'd pay big bonuses, but we're not paying because things are drastically different," what then?
Poor AIG says it has no alternative. Woe to the insurance giant. It's stuck.
Or they're crying wolf.
They're worried about keeping the "best and the brightest?" Well, if the purported best and the brightest got us into our economic mess, maybe we'd all be better off if AIG and the other financial corporations let them go. And if they don't get their millions, what are they going to do, quit? It's not like there are tons of jobs out there at the moment. 600,000 people are losing their jobs every month and I don't think the financial sector is really in a hiring mode at the moment.
And if they don't pay the bonuses, those employees have something they can do -- they can renegotiate or they can sue AIG! I am so not worried about whether there will be a run on employees suing AIG if they don't get their bonuses. Is there really a jury in the country that would side with them? Is there an attorney in the land who would take on those cases? Maybe one, but he's a smidge busy with Bernie Madoff.
And there are plenty of other sectors where employers are saying if employees want to keep their paycheck and health benefits, they need to take a salary cut. So, in light of all that, what is the government afraid of if it pushes AIG to make the same kind of decision many other employers are, especially since they're doing it with our money?!
I wish I had the real answer to that question. Something just doesn't feel right. President Obama's person was on the Sunday talk shows claiming that the fundamentals of our economy are sound and we ought to be buying cars. Larry Summers was almost speechless when asked why AIG and the other banks can't give us the details of where the money has gone. When was the last time you saw Larry Summers speechless?
I have absolutely no confidence that anyone is telling the real story when it comes to fixing the economy, whether it's our new administration or the corrupt financiers who made their deals with the devil and now want the rest of us to tell Beelzebub that they didn't really mean to sell their souls and ours with crazy loans and credit default swaps that are the equivalent of gambling.
The answer to the problem at the moment is simple -- the government tells lenders and the likes of AIG that if they took bailout money they can't pay bonuses to people. Period.
Why is Uncle Sam so afraid of such an easy solution?
Joanne Bamberger is a political and social media analyst who is the founder and editor-in-chief of the political blog, PunditMom. She also manages her addiction to all things political at BlogHer, where she is a Contributing Editor for News & Politics, and MOMocrats, a group blog about politics from the perspective of progressive mothers.
The WSJ reports today that the bailed out WS firms are figuring out ways to get past the bonus limits in the recent TARP bill by a massive increase in base salary. Now that the WH and Congress know what these firms are up to, will they proactively fix the loopholes in the TARP legislation? Or is another big production of "Outrage -2, the Sequel" in the works?!!
Date, show and time, please. I'm a Democrat and I supported Obama, and if this kind of crap is being said on TV, I want to know who said it and go after them. This is B.S. if it's true, and if you "paraphrased," shame on you.
If they are the brightest and the best of AIG then I'm the King of THE USA so bow down "peasants"!
FYI- before this so-called mortgage back securites fraud
2008 “This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division.
The federal prosecutor noted in the NCFE case: 'Ladies and gentlemen, this is a case of staggering fraud,' Wise said. 'It is one of the largest frauds the FBI has ever investigated.’
National Century's collapse never gained much attention outside business circles, largely because it was a privately held company
DECEMBER 2008- National Century fraud case produces 1st & only acquittal
Thursday, December 18, 2008 3:29 AM Prosecutors' case fell short, juror says
By Jodi Andes THE COLUMBUS DISPATCH
Who is James K Happ?
Mr. Happ served for three years as executive vice president of NCFE, ... prior to NCFE Mr. Happ also served as chief financial officer of the Dallas-based Columbia Homecare Group, Inc., In this role, participated in the divestiture of all of Columbia/HCA's home care operations.(Richard Scott)
Last year AIG and its subsidiaries spent about $9.7 million on federal lobbying, or about $53,000 for every day Congress was in session in 2008. The company's spending on advocacy last year was down from an all-time high of $11.4 million spent on lobbying in 2007.
"In the last 20 years American International Group (AIG) has contributed more than $9 million to federal candidates and parties through PAC and individual contributions. That's enough to rank AIG on OpenSecrets.org's Heavy Hitters list, which profiles the top 100 contributors of all time."
hey...that reminds me of....
remember ENRON??
didnt that have to do with the former administration, plus banks in England also?