Wonder how the people clamoring for these contracts voided would feel if the government wiped away health care benefits for UAW workers to save GM? Pensions for teachers?
An AIG Executive is contracted just like and assembly line worker. What we see in the AIG outrage in class envy.
That said, as shareholders of AIG, we should demand the compensation committee bring future comp plans in line with current business conditions.
Good points. When the principle or precedent reaches our level, we tend to think twice about whether it was wise. And, yes, future contracts certainly should be negotiated with bailout funds in mind for those companies that voluntarily accepted bailout money. That preserves the right of private contract by establishing the ground rules before the contracts are entered into by the parties.
well that *is* what will happen when the car companies finally enter bankruptcy. The government should have explicitly stated that them bailing out AIG (and taking a controlling stake) was equivalent to a type of limited bankruptcy and they had the power to nullify contracts.
AIG effectively went bankrupt, in which case these people would not have been paid anyway. I agree that this is a stupid precedent, since they should have covered this when they initially intervened, but anyone who writes “OMG, i get gov’t contracts and they’re gonna take my money!!” is just spouting more “the sky is falling! I swear this time!” crap.