Or: AIG, Bonuses, and Contracts.
The Huffington Post has a piece on this here that covers my thoughts pretty well, but I’ll elaborate anyways.
First off, let me say that I think the bonuses are pretty much bunk – these people should generally (GENERALLY, not necessarily all) have resigned or been fired and, therefore, not received them.
However, thanks to a clause that was put into the bill that gave them that money by Senator Chris Dodd (and then forgotten about, until Dodd could figure out a way to plausibly blame somebody else), AIG was contractually obligated to give these bonuses out.
Indeed, since AIG wasn’t forced into bankruptcy, the government’s bailout has contractually obligated the company to pay all of its liabilities at full value. Bonuses, credit default swaps, everything. Had the government let them go into bankruptcy protection, they could have had a judge help them renegotiate these debts at pennies on the dollar – happens all the time, though not to a company that large.
But, as stated, since it wasn’t, they had no choice. You see, you can’t just casually ignore your contractual obligations. If you do, the people you owe money to will sue you – and, legally, you will be obligated to pay. Indeed, if the folks who got these bonuses – and the hundreds or thousands of other people about to be punished with a 90% marginal tax rate in order to satisfy the public’s thirst for blood from 73 individuals – sue to challenge the law as being unconstitutional (which it 100% is – ex post facto laws aren’t even forbidden by the Bill of Rights, but by Article I itself,) it’ll add millions in legal fees to the government and AIG both… *and* they’ll still have to fork over the money.
The Dealbook Blog covers a lot of other reasons for not doing this in a post of its own, here. But I want to point out another letter of the alphabet here… D.
Or, Death Threats.
Mr. Barney Frank might not think the threats are serious, but that doesn’t matter. The fact that they’ve been made – that people have said that all the exec’s and their families should be strung up with piano wire – is more despicable than any amount of bonus you accepted from the company. And it terrifies me. Why? After all, I certainly didn’t accept any money from AIG.
It terrifies me because it’s straight out of the populist dictator’s playbook. Consider this – Frank gets the list (which he has, I believe). They decide to publicize the list, in the interest of “the people’s right to know.” Hell, let’s have some real fun – they don’t publicize it intentionally, but it instead “leaks” to a news source that goes out to scoop the rest of the media by publishing.
Now… if nothing happens, then no harm is done (aside from social/psychological harm), so nobody really complains about it… or, if they do, they paint themselves as an enemy of the people.
If anything *does* happen, the government is horribly shocked and dismayed at the violence out there… but, after all, it’s their own fault for doing something so despicable. In the interests of healing these sort of rifts, their estates could be confiscated and auctioned off, just like the property of a drug kingpin.
And the message is sent. Don’t screw with us, and make sure you toe the populist line, or your name might be on the next list.
Now, do I think this will happen? God I hope not. I’m a writer in my spare time, folks, which means I tend to think in terms of overly dramatic events that could happen. This is the sort of thing you expect to happen on a show like 24, not in reality, and I believe it will remain in the realm of fiction.
But the possibility that it won’t – and that it could so very easily cross the border from fiction to reality – is perhaps the biggest reason that we need to stop, back up, and think.
There is no freakin’ reason that people should be this pissed off. So back off, and save your ire for the people who’ve deserved it. I’ve seen less anger in response to serial killers, for Gods’ sake. At least as far as I know, nobody suggested that BTK’s wife and daughter should be strung up with piano wire….