Yay.“All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses,” said Mr. Obama, who called the issue one of “fundamental values.”Well, "values" unless you're one of those "self interest, cronyism and hedonistic accumulation are inherent positives" free-market-without-freedom types.
I agree that these bonuses are wrong. I also believe that the government bailout should never have happened in the first place. This is an example why they should never have happened: What the government funds, it controls. Now that AIG is receiving federal funds, it can no longer even control how it pays its own employees. It cannot even fulfill legal contracts with its employees, because the federal government refuses to let them. AIG was contractually obligated to give these bonuses long before the bailout ever happened, and it was simply trying to comply with its legal obligations.
ReplyDeleteIn other words, while I am pleased that the bonuses are being blocked, I am at the same time pained that everybody is so approving of federal intervention into a private industry. This is, in a sense, tragedy disguised as something good.
Does the President even have the legal authority to interfere?
ReplyDeleteThis sets a very scary precedence.
ReplyDeleteFirst, when the bailout money was given to AIG, they were specifically told in writing that the money would not effect any legal contract made with AIG or its employees before February 2009. In other words, any restrictions on the money would only apply to new contracts, and that AIG was specifically authorized to meet their legal obligations that they incurred prior to that date. Part of those obligations was a legal contract to provide bonuses to some of the employees. Now, I think AIG should never have committed to those bonuses.
However, here is the scary part: We have an executive branch who is now trying to make void legal, voluntary contracts made prior to any federal involvement, at the same time violating his own legal agreement with AIG. And people are applauding him. This sets the precedence of allowing the executive branch (which has no real power except to enforce the laws of the legislature) to null private contracts between consenting parties merely because one of those parties received federal funds (after the contracts were made). This is a serious breach of the rule of law (ex post facto, separation of powers, freedom to contract, etc.). And, because the issue is something people almost unanimously agree about, nobody's complaining, setting the precedence of public approval for the government violating it's own agreements and interfering in the private contracts of ordinary citizens.
The cancellation of these bonuses is more of a symbolic and ethical issue than a way of ensuring that federal money is spent correctly in any significant way. The amount of the bonuses ($165 million paid to executives) is very large, though the company received more than one thousand times that from the government.
ReplyDeleteI'm glad that Obama is going to any legal extent to cancel these bonuses, as I believe it's wrong for corporations to give large bonuses to their executives while largely ignoring their workers (and especially while receiving federal money).
Perhaps it's fair to say that the hypocrisy and plunder of these self-serving "businessmen" angers me at a very personal level - it's part of what's wrong with human nature and society - while the amount spent by the government to that one corporation alone is so large I can't even comprehend it. It would be fantastic to get that $160 billion back, but it's obvious that Obama is doing the politically viable thing by focusing on a diversionary issue like this: a legitimate scandal but only an infinitesimal part of the issue as a whole.