Laura Bramble
THE RED MENACE
I don't envy Congress, the Obama Administration, and AIG's Edward Liddy. They are stuck in a tight spot. They have to try to find a situation that will appease everyone while fulfilling a contractual obligation and promoting what is fair at the same time.
The fact is that the people at AIG who were owned bonuses were going to get their money whether we liked it or not. AIG did not declare bankruptcy, so no one was able to go in and force a change of terms on the existing agreements. If AIG had refused to pay them, whether ordered to by the government or not, at the very least there would have been settlement money paid on a breach of contract lawsuit. No judge can or will overturn a valid contract as a point of law just because it is distasteful, so if the AIG employees had decided to take it to court, they could have walked away with all their bonus money plus damages and attorney's fees. Does anyone think that Liddy, who came out of retirement after being specifically asked to come in and fix AIG, a man who is earning $1 for his efforts, liked having to pay those bonuses? Do you think that if he had a leg to stand on in not paying them that he would have refused? I'm sure that he had quite a long talk with the legal department and was told there was nothing he could do.
Enter the Obama Administration. I don't know what else they were supposed to do, short of forcing every employee due the bonuses to sign an amended contract. That's a pretty tall order and would constitute a grey area in terms of coercion. While it may seem fair to place blame solely on the Obama Administration and Geithner's Treasury Department, remember that AIG got it's first mother lode of cash courtesy of the Bush Administration and Treasury Secretary Paulson with little or no conditions. The Congressional Republicans can hardly cry foul, because they had the White House and the ones sitting in Congress now were the same ones who helped slam TARP through back in September. Critics such as Limbaugh and O'Reilly want to put the blame on Obama, Geithner, and Congressional Democrats, basically saying "that's what happens when you push legislation like the Stimulus Bill through without giving anyone time to read it." That criticism is moot since the issue of unconditional government bailout money to banks and financial service companies predates the stimulus bill.
Now Congress, in an effort to save face, is trying to push legislation through that will tax those and similar bonuses paid by other companies who have received government bailout money at a 90% rate. While there is a part of me that loves the idea in a "stick it to the man" kind of way, the reality is that this is not the right way to handle the situation. If I had a contract with someone, I would expect it to be honored and would very much resent the government coming in and penalizing me if I did what was contractually required of me to earn that money. I might choose to give all or part of the money back, which is what Liddy has publicly requested, but it should be my choice. After all, with the bad job Congress did on this issue, how they have handled the economy over the last few years, and the fact that the US is in fiscal trouble, have they decided to refuse giving themselves their due pay raise? Absolutely not.
I too am frustrated and disgusted by the whole thing. However, as distasteful as it would be, the best thing to do is write this whole situation off as a very costly "lesson learned" and do everything possible to prevent it from occurring again. What's done is done; let's put it in the rear view mirror and move on, placing due focus on what we need to do to get this country moving again.
Laura Bramble
The Political Simpleton
www.politicalsimpleton.com
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