Obama is correct in attempting to disallow bonuses to AIG employees, no matter WHAT is in their contract. Without the government holding it up, AIG would've gone bankrupt long ago, which would have nullified those employees bonuses anyway. Can't say the employees are lucky to have a job, tho, since the good money-making employees within AIG could likely apply their craft at other insititutions and get paid nicely for their effort. But if you're the world's best first mate on a ship that's going down, you never get to see your pay. Choosing your employer is part of life's risks. Some secretaries at MSFT become millionaires, some secretaries get minimum wage their entire career, that's the way the capitalistic cookie is suppoed to crumble. However, one huge negative point to Obama's rightful attempt to deny employee bonuses at AIG, will be the flight of any decent employees to other companies. To the extent there is any value to these employees, and any value to AIG's non-loss-making businesses, that value quickly deteriorates as the people that make those businesses work, go away in fear of not getting paid. It makes sense that a gov't bailout of a completely decimated company shouldn't result in nice nice for shareholders. Shareholders, like employee bonuses, should've been knocked out months ago. AIG is a zombie company, kept alive solely to prevent counter-party disaster amongst other financial firms, such as BAC for instance, who just recieved a nice payment from AIG it wouldn't normally have gotten if AIG was allowed to fail (and it should be allowed to fail). So some day AIG shareholders will be the same victims as AIG employees, how this happens exactly is anyone's guess. But one thing is clear, the value of the good businesses (if there are any) inside AIG is taking a hit with the latest political backlash concerning bonuses.
$0.9179 (03/16/09)
