Author: Rory B. Bellows
Everyone is up in arms over AIG paying $165 million in bonuses. Outrage is the coin of the realm in Washington, D.C., bu no one considers what taking this outrage over these bonuses to their natural conclusion means. These bonuses are contractual obligations. If these bonuses were not paid, the recipients would have an iron clad case in court to get them. If Washington stops these bonuses it means contracts are meaningless. The sate could step in and cancel any agreement it wished. The only thing that now matters is your ability to curry favor with politicians because the state has the guns and the legal monopoly on force. And make no mistake, force is the only way to get AIG to stop these bonus payments they are obligated to make.
The outrage from Chairman Hussein is to get people to forget that it was his administration that allowed this to happen on their watch because they didn’t write the bailout provisions is such a way that prevented tax payer monies from going towards bonuses. Once again, Secretary Geithner got caught with his pants down. The only reason AIG had the money to pay out these bonuses is because Chairman Obama bailed them out.