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?