The real 'outrage' behind AIG's bonuses

[Omaha Steve]

http://www.latimes.com/news/opinion/la-oe-rutten18-2009mar18,1,6865252.column

The AIG debacle is a slap in the face to American labor, which was asked to sacrifice so automakers could survive.

Tim Rutten
March 18, 2009

President Obama and his administration have made a complete shambles of the AIG bailout, and the failure won't be papered over by the chief executive's populist campaign rhetoric.

To call it an "outrage" doesn't begin to describe the disgraced insurance giant's payment of $165 million in bonuses to securities traders in the very division whose dealings in so-called credit default swaps was at the root of Wall Street's current meltdown.

All this for the guys who pushed over the first boulder in the current financial avalanche. And for what? So that American International Group Inc. can "unwind" its disastrous investments. It's a bit like a bank robber insisting he's entitled to a finder's fee for telling you where he buried the loot.

Meanwhile, the New York Times reported Tuesday that Goldman Sachs Group Inc. is using millions in federal bailout money to make loans to its employees whose stakes in the firm's internal investment partnerships have been undermined by the collapse of the real estate and equities markets.

In its own way, what's happening at Goldman is every bit as appalling as the AIG debacle. Has anyone offered you government funds to shore up the losses in your 401(k) or retirement portfolio? It's a ludicrous double standard that reflects the ethical sinkhole Wall Street has made of its relationship with the rest of American society.

AIG insists (and the Obama administration can't seem to make up its mind whether it agrees) that the company is "contractually obligated" to follow through with the bonuses. The last time the right of contract was draped in as much sanctimony was when lawyers representing the robber barons of our first Gilded Age argued that the inviolability of contracts precluded the adoption of child labor laws.


FULL story at link.

[MrPerson]

1. Is that I didn't get one.