Obama's Critical Early Test: Corporate Arrogance

Dan Gillmor is a BoingBoing guest-blogger.

This is Obama's air-traffic controllers opportunity.

In 1981, not long after taking office, President Reagan faced a strike by the nation's air-traffic controllers. He fired them, broke the union and set in motion a generation of anti-labor policies that were a tenet of Republican orthodoxy. Whether those policies were ultimately more positive or negative is still a topic of political and economic debate, (I think the aggregate outcome was damaging) but Reagan's decisive action made a huge difference that reverberated through his presidency and several more.

Today, we face corporate arrogance that is almost transcendent and vastly more damaging than any of organized labor's excesses. Wall Street's barons, and the people who have been running and allegedly governing many of the nation's biggest companies, have raised a collective middle finger to America even as they've forced us to bail out the enterprises they've run into the ground. When commentators fret about corporate leaders' tone-deafness, they are implying that the executives simply don't get it. Oh yes they do.

In coming to Washington for bailouts, they said: "This is a stick-up. Give us the money or we'll kill the economy."

In creating their disgusting compensation schemes, they said: "Pay us as usual, not for performance but because this is our just due as masters of the universe. And because we deserve anything we can loot from whoever has the money, whether it's shareholders, customers, taxpayers or anyone else."

The puzzle of the past week is not that Americans are furious. Only an idiot (or a Wall Street banker) wouldn't be angry upon learning of the unconscionable "bonuses" renegade ward-of-the-taxpayers AIG wants to pay to its employees -- including well over $100 million to people in the same unit that completely screwed the company and then threatened to take down the entire global economy if we refused to subsidize (so far) to the tune of $170 billiion.

No, the mystery is why this outrage hasn't come to the surface sooner. And why it's not more dangerous.

Why, for example, didn't Americans take to the streets earlier this year when we found out that Merrill Lynch and its conniving buyer, Bank of America, had paid almost $5 billion in bonuses -- a number that makes the AIG bonus money seem small -- after taking tens of billions from taxpayers? Why didn't we scream bloody murder when the Bush administration flatly refused to disclose where the hundreds of billions in bailout money was going in any kind of detail?

One reason, perhaps, is that we are a soft and lazy and uncurious people. We are quick to being pissed off at relatively small things -- typically minor but sensationalized stuff that tabloid TV news programs (i.e. CNN, MSNBC and Fox and local stations) decide to make into issues -- but slow to grasp the significance of the really big and crucial stuff until it's so powerfully in our faces that we can't avoid it any longer.

AIG's bonus payout tipped the scales, or, maybe more accurately, removed another kind of scales from people's eyes. It demonstrated precisely what suckers the Wall Streeters have been taking us for.

How can we blame them for deciding that they were entitled to loot us, again and again? We were electing politicians of both parties who have been corrupted by and enablers of the very system that created the credit bubble and its catastrophic outcome. We weren't demanding accountability from anyone, including ourselves.

But now it's time. The American public is not blameless in what's happened. But we are finally waking up to the level of arrogance that dominates wide swaths of corporate America, particularly Wall Street. These transcendently greedy people, who aren't just indifferent to what the rest of us think but who actually believe they're entitled to loot the treasury and our children's futures, need a slapping down.

President Obama has a chance to turn this in a positive direction, but he's going to have to risk a lot of his political capital. He's going to have to admit that he, too, has been player in the corrupt system, albeit a relatively bit player.

Then he has to say, and mean it, that this crap is going to stop, right now -- and explain how he's going to do something about it.

We have a chance to reform the corrupt political and corporate governance that has created a system in which the people at the top brazenly tell the rest of us to go screw ourselves. It's a small chance, but if we don't do it now we will never do it, and the market economy itself will have no real future.

One institution can most effectively lead the charge in a way that can create change that doesn't turn into a mob-driven frenzy: the presidency. Is this president up to it?


  1. The money market is long-since international. Us europeans know that you Americans think of yourself as world leaders. But in this case, you’re lost, if you fail to include other nations. These globalized companies can simply draw back to another country, taking your money with them.

    Only an international Cooperation can end this bullshit. And of course, most nations will be too proud – or too greedy and corrupted themselves – as to join it.

    May Obama succeed in taming the bear anyway. I wish him good luck!

    Greetings, LX

  2. One piece of important information- whether or not it matters- Geithner actually approved these bonuses! It wasn’t until the public and then Obama found out about them that the outrage began. So, in all fairness this was not a secret backroom deal. (this doesn’t diminish the anger, just spreads it around a bit)

  3. even as they’ve forced us to bail out the enterprises they’ve run into the ground.


    What “forced”? Politicians sold us out to provide corporate welfare.

    There’s nothing forced about it; politicians are collaborators.

  4. John Robb describes what we’re seeing as “Regulatory capture”, in that interests the government is meant to be in control of have managed to turn that around. They clearly don’t have total control, but if they get the money, that’s enough for their purposes. I don’t agree with all of what he writes, but he seems to have hit the nail on the head here.



    How has this been achieved? Largely through writing contacts so that “bonuses” become entitlements, and shaping the law so that little or nothing can actually be done.

    How did legislators fall for this? Well, in the UK, which I know more about, it’s been because for thirty years, governments have seen business as something to be admired uncritically, and whose mores should be used for every kind of organisation. Don’t mistake me for someone who reckons business is an intrinsically bad thing. It just isn’t the solution for every kind of problem.

    I know less about the USA’s politics, but uncritical reverence for business seems pretty common amongst politicians (the idea of Democrats and Republicans as the two wings of the Business Party has real plausibility from here), and influencing politicians via campaign contributions seems to be throughly institutionalised.


  5. Obama needs to fire Geithner, who appears to be either a co-conspirator with the AIG execs or else massively incompetent.

  6. This is a AIG debacle test for Obama and his team so far in my part of the world he’s failing this one.

    Obama, Reid, Pelosi all share a deer in headlights as they confront the firstorm – they better hope American Idol puts the sheep back to sleep

  7. If lending is so critical to economic health, then make the government lend the money to small non-profit organizations. Clinics, start-up preschools, after school programs, vocational programs. The AIG execs should pay their penance by donating the money directly to organizations that employ college educated people and serve the underserved. For starters.

  8. Some people have observed that Obama seems to be very cautious around the military/industrial complex. You know, that shadow government that doesn’t exist. Even if those fears are unfounded it does seem there are very powerful interests at play. I guess that’s kind of a truism but it doesn’t really seem like we have much of a say in any of this.

  9. If Obama gives another dime to AIG he becomes an instant one-term president. He is planning to move another 30 billion into AIG. Having supported him in the last election, I can say with complete certainty that if he gives that money to AIG, I will be looking for another candidate in 2012.

    You don’t want a crook in the White House, but you don’t want a fool either.

  10. Nobody’s “taking to the streets,” because that’s a losing strategy, but you are absolutely right that this will save or doom the Obama administration. There’s a new sheriff in town – he needs to act like it.

  11. To repeat an idea I read here yesterday . . . Obama should threaten to read the names and addresses of the bonus recipients to the nation.

  12. 2012, really? Every person in charge knows: hold on long enough and everyone will forget. It doesn’t matter what Obama (or anyone else) does now, only what he does in July of 2012 and on.


  13. I think the arrogance is running just as high on the government side. What makes a Senator think he/she knows anything about how a bonus system works or how to retain talent? The government is good at this?

    As much fun as it is to think everyone in this mess is an idiot, it probably is not true and not helpful in solving the mess. Creating a media circus around this along with plenty of partisan jabs will not help move the economy forward.

  14. I think people underestimate the nature of this crisis for Obama. This AIG company is insurance. People are terrified of insurance companies. They pay and pay and get sick and then get treated poorly by insurance companies. There’s a great deal of hatred out there. Serious, ready-to-explode-in-riots hatred. I’m not even remotely kidding.

    People in this mess are idiots. They are putting themselves right in front of a seething mob of angry people. At this point, I would not want to be remotely connected to a banker or an AIG employee. I would also have serious political concerns about being connected to the Obama administration.

    There’s big fire out there and no one has called the fire department.

    One bad turn of events – a catalyst if you will – and we’re going to have a nightmare. Obama is moving his mouth but nothing’s coming out.

  15. The GOP congressmen who are calling on the Secretary of the Treasurer to resign ought to consider doing that as well.

    After all it was the Bush Administration policies that put us in this mess.

    Anyway that the GOP can think of to weaken President Obama’s chances by weaking the loss of his Secretary of the Treasurer. After all lately the GOP has been saying no to any policy that Obama puts fourth to help the people. The GOP’s policies under President Bush put us in the state of the economy that we are now in.

    Where was all of this GOP political grandstanding when “taxpayer dollars were being wasted” under the Bush reign?

    Wingnuts love to criticize but offer NO core concrete solutions. They keep going back to the Republican playbook — the very book that got us into this mess.

    Thanks, Bush.


  16. “What makes a Senator think he/she knows anything about how a bonus system works or how to retain talent? The government is good at this?”

    …because the private sector has done such a bang-up job running these businesses and retaining their talent (considering several bonus-receivers at AIG have since left the company)?

    It’s not like the gov’t’s cash infusions were hostile takeovers. The companies BEGGED us for this money, we were told we had to give it to them RIGHT NOW or face dire consequences. At the point that they’re asking us for our money to stay afloat they forfeit their claims of greater knowledge about how businesses work and how to retain talent.

    And creating a media circus is a GREAT way to move the economy forward. The problem is that in the interests of “setting aside childish things” we’ve abandoned all accountability. Playing the blame game and fanning the flames is ESSENTIAL to keep the pressure on both the CEO’s who steal from taxpayers and the government officials who collaborate in that theft.

  17. @GGJudas

    What makes you think large companies have any idea about bonus packages and how to retain intelligent useful people?

    Certainly any of the companies I have worked at don’t. They care about the shareholders and how much “they” are getting out of it. So we are suppose to be okay that they people get million dollar bonuses for letting their own company go into the ground because they know best? REALLY?!

    I’d love to see Obama just call them to the white house and say this is how it’s gonna be. And if the execs just laughed I’d put their name on every IRS audit, TSA no fly list, and personally denounce them to the American public as the greedy money grubbing whores they are.

    Obama hasn’t realized yet, he is the government. He controls almost everything. If there was ever a time for a president to be blatant about his power now is it.

  18. We have failed to take to the streets not because we’re complacent; we have failed to take to the streets because we’re complicit.

    It’s an inversion of Alexis de Toqueville’s insight that Americans can’t stand it when one of us acts better than everyone else. What we really won’t stand for is when anyone tries to take away the infinite swindle, the breathtaking possibility of something-for-nothing. That make-believe is our birthright. Those criminals are living the shadow version of the American dream.

  19. Good post Dan.

    “We were electing politicians of both parties who have been corrupted by and enablers of the very system that created the credit bubble and its catastrophic outcome.”

    This is how I respond to my friends who are party loyal.

    I like to ask them who the biggest crooks in Washington are. I listen to their response and give mine. “The politicians.”

  20. The problem with lynch mobs is not that the person being lynched is innocent – they are sometimes guilty. The problem with lynch mobs is that they are lynch mobs.

    Contract law is the basis for all business. If contracts cannot be relied upon because the federal government will act as third-party contract-buster at the whim of outraged citizens, then we may end up with larger problems than fat-cat executives who are not made to walk the plank.

    The AIG execs, guilty as they are, are a red herring. This is a distraction, a head fake, and if you felt a tug at your wallet just now, there might be a reason.

  21. “And creating a media circus is a GREAT way to move the economy forward. The problem is that in the interests of “setting aside childish things” we’ve abandoned all accountability.”

    I would say that a media circus is a childish thing – it even has the word circus it it! I have never seen blame games do anything to fix the problems.

  22. This is our chance to clean up our dirty system. We need serious political reform, because our president and many of our congressmen have taken money from AIG and other companies we have bailed out and will continue to do so unless the system changes. The fox is not only in the henhouse, he is pimping out the chickens and their eggs to the farmer (i.e. us poor taxpayers). Wake up people. The government is not your friend. Regardless of weather someone has a D or R after their name they are interested in their own agenda, not the agenda that will help America and the American taxpayer.
    Obama is not he second coming….he has kept in play most of the policies that only months previously had people calling for war crimes trials for Bush and Cheney. Where is the outrage? Why are those who put him in power not holding his feet to the fire and requiring him to fulfill his campaign promises?
    The worst part is that the administration doesn’t even seem to be taking this seriously until public opinion forces them to. Obama and his cronies have been partying it up in the Whitehouse like it’s going out of style, while the economy slides into the toilet. Nero had nothing on these guys…

  23. Wigwam Jones,

    I agree. The problem is not really the honoring of the bonuses or those compensation contracts or packages or whatever they are. The problem is simply the handing over of our government money to a poorly-run, possibly criminal enterprise.

    I think Cuomo in New York is getting very close to finding criminality inside AIG. So, if there’s some reasonable suspicion of criminality, why doesn’t the federal government raid all the AIG offices, take all the computers out and completely shut the bastards down? That would work pretty well and might save everyone a lot of money.

    It’s probably about the only thing that will help Obama win a second term. I hate to say it, but I think he’s blown it already. I really like him and support him, but wow, I just don’t see it happening here. And his Treasury Secretary! What a completely flaccid nincompoop.

  24. @bcsizemo “What makes you think large companies have any idea about bonus packages and how to retain intelligent useful people?”

    I have worked at both types of companies and I have seen a huge difference. Maybe it is comparing not so good to terrible but it is still better. I did see good people stay at some of the private companies whereas I saw all the good people leave from my government job.

  25. Flashback: It Was Bush, GOP That Opposed Executive Compensation Caps

    It is a rather curious spectacle to see congressional Republicans express outrage at the exorbitant bonuses being handed out by bailed-out companies and blame the Obama administration for failing the curb the practice with AIG. Because when the first installment of the Troubled Asset Relief Program was passed it was the Bush administration and GOPers in Congress who were insisting that caps on executive compensation not be part of the legislation.


  26. This is not the biggest problem our country has right now. It is not. I am angry because we are spending SO MUCH TIME on this when there are other things they need to be working on! Talk about a distraction.

  27. I still think Mark Evanier’s idea regarding AIG is the best I’ve heard so far.

    “No one on this planet is better at figuring out how to avoid paying money that is contractually guaranteed than insurance company execs. Let’s hire the folks who run AIG to come up with a way to get out of paying the bonuses to the folks who run AIG. Or if for some reason they don’t want to do that, let’s hire the staff at some other big insurance company to find a loophole.”

    The argument that we need to be very, very careful in unpicking contract law is right. What you do is to sue people for breach of contract…

    The big corporates are routinely “in breach of contract” simply by virtue of seeing whatever it is they do in terms of commodity rather than service. I wonder if the result of this debaclé will be that people may feel empowered enough to challenge them?

  28. AIG Bonuses are the law! An amendment written into the budget by Sen. Chris Dodd (D-CT) and signed into law by Obama. Sure seems like the “outrage” is a bit manufactured. The two biggest recipients of AIG political donations?? Obama and Dodd.


    From page H1412 of the Final Stimulus Bill, “SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE:

    ‘(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.”

    This amendment provides an exception for contractually obligated bonuses agreed on before Feb. 11, 2009, which exempts the very AIG bonuses Obama is condemning every single chance he gets. The amendment is in the final version and is law.

  29. It’s not entirely fair to call American’s “a soft and lazy and uncurious people”.

    If this were true, then the political class wouldn’t have invested so much effort in gerrymandering (a process that allows elected officials to effectively choose who votes for them by cutting hostile demographics out of their districts).

    The very idea of “safe seats” is an affront to democracy. And yet, more than 90% of Congressional seats are effectively owned by one party or the other.

    Congressional accountability is job #1. Like Lessig says, this isn’t the biggest problem, or the deepest problem. But it is the first problem, in that a failure to wrestle control of Congress from special interests will doom each and every attempt to secure the Common Good.

  30. We need to revoke their corporate charter due to failure to serve the public interest. Oh, wait, we can’t do that anymore :(

  31. We don’t have to initiate complex lawsuits under corporate law to retrieve the bonus money. If the management of a failing company demands bonuses for their performance, they should be prosecuted for fraud: if the company lost money because of their actions or lack of action, they did nothing that merited a bonus; if the company did not use their supposed expertise, they did not merit a bonus. Claiming money for a bonus you did not earn is just as dishonest and fraudulent as Madoff’s Ponzi scheme!

    I hope everyone reading this contacts their representative and asks for prosecution of the bailout crooks. They’re worse than the looters in New Orleans after Katrina!

  32. @27
    Fantastic point that I think most major news organizations, domestic and international, have failed to include. Although the interpretation stretches the cited material, it does seem to ring of ‘I giveth and then taketh away’.

    While I think it’s a moral issue that wasn’t handled in the best way, this providing bonuses to AIG staff, in some respects shows that AIG was willing to do what Obama and the current adminstration are not doing. AIG promised in employement contracts that these people would recieve bonuses for doing certain things. The certain things were not directly linked to the company’s financial or opertional performance (although in hindsight maybe they should have been). AIG was obligated to pay. They paid. Now they are taking flak.

    The administration promised that bonuses agreed to before a certain date would be paid. Now we are all outraged because they were paid. Bright legal minds are pouring over contractual law to see if they can sends some heads rolling.

    Isn’t a presidency about keeping promises?

    Shouldn’t someone have figured out the bonus point would be a possible cause of concern later on? Shouldn’t that be what we are concerned about? What if there are more loopholes?

    Do we really think that the bueracracy inherent to democracy will REALLY let Obama do whatever he thinks is the right thing to do? They call it politics for a reason no?

    I don’t agree that AIG’s staff deserved bonuses, but what’s promised (contractual or otherwise) needs to be delivered upon. Whether you are a politician or a payroll clerk.

  33. Each day this pap carries the news cycle I both cringe and laugh.

    No one bothers to mention that Senator Obama was ranked second among recipients of campaign contributions from AIG in 2008. Check the numbers for yourself. The President was topped only by Sen. Chris Dodd (D-CT).


    Dodd is a bit more transparent than the President, though; going so far as to guarantee the bonuses would go through by his amending recent legislation. Legislation which Mr. Obama promptly signed.

    The Presidents hurried, no-questions-asked signing of the legislation meant one of two things: Obama supports the bonuses, or he didn’t bother to read the legislation. Either way it’s he and Dodd who should be chased by pitchfork-wielding peasants, not AIG.

  34. There’s nothing forced about it; politicians are collaborators.

    That’s an awful broad brush you’re painting with.

  35. NPR had a story on the details of the contract this morning:


    The interesting part is that if the people who are to be paid the retention bonuses leave it triggers an “out” for AIG customers to demand a return of their money, which could be in the billions of dollars.

    Funny AIG doesn’t try to spin this as a penny wise pound foolish argument.

  36. 27 & 31 — the dodd thing would be a good talking point if it was actually true


    32 — since these #s include personal donations made by employees i would be surprised if he WASN’T at the top of the list. after all, he raised a ridiculous amount of money from individual donors. also, it’s not just obama. clinton and mccain are 3rd & 4th and 6 of the top 7 were presidential candidates in 2008. this doesn’t strike me as an especially useful metric.

  37. I say we* pay the AIG bonuses using the most toxic of the toxic assets in lieu of cash.

    It gives an incentive to use their knowledge to dig us all out of this mess, and shackles them with a huge liability if they fail.

    * – the 80% owners of AIG, as well as a lot of other toxic crud

  38. AIG bailout = $170 billion. AIG bonuses = $165 million. Unless my math is faulty, we’re talking about less than one tenth of one percent of the bailout being used to fulfill contractual and litigable obligations. The issue is a big, fat right-wing red herring. But, hey, wallowing in cheap outrage is more fun than coming up with a constructive solution, neh?

  39. people need to feel better than helpless. Stringing up a few arrogant suits may not have dollar value, but gawds is it satisfying! Who knows? Enough ristos go to Madame Guillotine and perhaps it will encourage the others to give enough evidence so the real criminals (Baldy and Oookie) stand trial.

  40. antinous, if the execs can get the money out of their now toxic bonuses it means that they found a way to fix their mistakes, un-screw the pooch, and by that time and under those conditions the bailout recipients should then be able to repay the bailouts.

    Otherwise they’re more screwed than anyone else, holding liabilities far larger than their wealth, as they should be.

    As it stands now the execs have every incentive to use their knowledge of where the weaknesses are to further enrich themselves at our expense, and further screw the proverbial pooch.

    Not saying it’s THE answer, but taking the absolute worst 0.01% of the market and stapling it to the biggest bastards in the game as a response to their blackmail would feel good.

  41. We are not “uncurious” as you suggest
    We are crime victims struggling to find an honest advocate in the fight against devious and relentless thieves

  42. I highly recomend this episode of TAL

    Bad Bank – This American Life #375

    “The collapse of the banking system explained, in just 59 minutes. Our crack economics team—the guys who explained the mortgage crisis, Alex Blumberg and NPR’s Adam Davidson—are back to help all of us understand the news. For instance, when we talk about an insolvent bank, what does it actually mean, and why are we giving hundreds of billions of dollars to rich bankers who screwed up their own businesses? Also, two guys go to New Jersey to look at a toxic asset.”

    “Other shows on the financial crisis: Giant Pool of Money and Another Frightening Show About the Economy. And you can get daily updates about the financial crisis on Alex and Adam’s Planet Money podcast and blog.”

  43. @ #41 Antinous

    Not sure how it happened, but it appears we agree.

    @ #42 Takuan

    people need to feel better than helpless. Stringing up a few arrogant suits may not have dollar value, but gawds is it satisfying!

    How far does one go to obtain ‘satisfaction’ and then what?

  44. Not sure how it happened, but it appears we agree.

    I noticed that and share your alarm.

  45. got off too easy. They should be forced to live long lives. Long, poor lives. Expect to see quite a few bosses swing though. China, India,Africa , S. America for starters.

  46. @ #38 – Here’s what Dodd had to say…


    Firedoglake “debunked” something, but it wasn’t my point. These guys are feigning anger about things they knew about and tacitly approved of when no one was looking. Who’s idea it was notwithstanding, they’re all complicit.

    All those earmarks with the argument “… but it’s such a small percentage of the whole bill it shouldn’t be an issue.” And here we have a small percentage of the AIG bailout money going to bonuses but let’s make the people think we’re really angry over this. Yeah! Obama is mad as hell and he’s not going to take it any more!! Uh, except when Fannie and Freddie are about to pay their top execs big bonuses… oh well, let’s go on Leno! Bread and Circuses, Bread and Circuses…

  47. President Obama has a chance to turn this in a positive direction, but he’s going to have to risk a lot of his political capital. He’s going to have to admit that he, too, has been player in the corrupt system, albeit a relatively bit player.


    Pigs flying into the frozen wall of hell, maybe. But not that. Never, ever, ever.

  48. What can we do? I can call the white house or write a letter but that won’t change a damn thing. I can organize a protest but I’ll just get arrested…probably before it even starts (patriot act: protester = terrorist). So what is my recourse?

    I could take matters into my own hands and start a chain of vigilantism, but then I risk life in prison to get back at someone who just laughs at me all the way to the bank. So what can any of us do?

    What sense does it make to give the problem all the energy anyway? You punish one criminal, there’s a hundred more who were less conspicuous; I say we focus on solutions.

    Let’s cut bankers out! We have the internet, let’s model a lending system after kiva.org or lendingclub or timedollar… How about a government that takes votes directly from the people online? Cut out the politicians, we trust our banking to be done online, why not our democracy?

    Ok, too long… just one more thought:

    What if there was a connection between economic recession/depression and the rise of murder/violent crime offenses or a the suicide rate? How about the unwanted pregnancy rate which begets children who grow up with psychological tendencies for violence? Would the people who crashed our economy be responsible indirectly? What if we label it? Let’s call it “reckless endangerment of suffering to the masses”.

    I know there will be people who read this and think “ok that’s stretching it…” but do you really believe your actions don’t affect others? There’s a crime for reckless driving your car… why not a crime for recklessly driving a multinational corporation?

  49. Political polarity is more a circle than a line — the far right and the far left have a lot in common.

    Most importantly, both extremes believe in a financial `responsabilty’ that doesn’t exist for either the ‘fratboys’ nor the rural elite!

  50. Obama has shown every sign of being in on this from day one. Rather than stop it, he’s going to institutionalize it. You are now the slaves of AIG.
    Get used to living under complete fascism.

  51. Question:

    Leaving aside for now the issue of Obama signing legislation that explicitly provided for these bonuses (I haven’t research that and have no opinion at the moment), if AIG had gone bankrupt back in September, as almost any other company in the world would have if it had made itself insolvent, would these executives still be contractually due bonuses (pro-rated through September or otherwise)?

    It seems to me that AIG is bankrupt in all but name, and when you go into bankruptcy, a whole different set of rules apply to existing contracts. Thanks to anyone who can shine light on this.

  52. It seems to me that AIG is bankrupt in all but name, and when you go into bankruptcy, a whole different set of rules apply to existing contracts.

    Bankrupt in all but name is not bankrupt. When I declare bankruptcy, people to whom I owe money may come and take their property back. Until then, not. Even if I’m ‘all but bankrupt’.

    At the moment, though, AIG bankruptcy does not seem possible. We own (as the US government) 80% of their stock, it is ‘all but’ nationalized.

    In any case, AIG is just a shiny red button to fascinate the rubes who need an outlet on which to vent their rage at the entire economic situation.

    Pay no attention to the fact that the Fed just bought up a cool trillion dollars in treasury bills to placate our new Chinese lords and masters, which they paid for by printing a trillion new dollars based on nothing but ‘the full faith and trust of the American people’, because hey, understanding that stuff is hard work.

  53. People keep mentioning contract law, how utterly sacred it is, and how awful and horrible it would be to start violating contracts no matter how cheesed off we are with these parasites.

    I’d be a bit more impressed if this kind of thing applied to real people, not just the rich elites.

    When provisions were written into the auto bailouts dictating that to get bailout money the auto companies had to tear up their contracts with their employees, did anyone in the whole media say “Oh, but how can they do that? Contracts are sacred!!!”
    Of course they didn’t. Contracts are never sacred when they’re with ordinary people. So why should ordinary people consider them sacred?

    1. The validity of a contract is in direct proportion to the ability to pay attorney’s fees.

  54. that only gains you entry to the Court Casino. It still all depends on what the spin of the Wheel by the Head Croupier on the bench hands you.

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