A rich irony here is that any nonfinancial company in A.I.G.’s straits would be in bankruptcy, and contracts would have to be renegotiated. The fact that the government is afraid to force A.I.G. into bankruptcy, despite its crippled state, is the main reason Mr. Liddy felt he couldn’t try to redo the contracts.As it is, the politicians in Washington, spooked by a public furor over news of the bonuses, reacted as politicians always do to such crises: They calmly reviewed the evidence, looked at all the figures, considered the ramifications--and then panicked.
More from Nocera:
Oh, and let’s not forget the bill that was passed on Thursday by the House of Representatives. It would tax at a 90 percent rate bonus payments made to anyone who earned over $250,000 at any financial institution receiving significant bailout funds. Should it become law, it will affect tens of thousands of employees who had absolutely nothing to do with creating the crisis, and who are trying to help fix their companies.Does anyone remember this fact? That we are trying to save these companies? So why are the politicians hauling a guy who gets paid a dollar a year and who only took over AIG last September before a Congressional Committee for a public caning?
As Nocera points out, most the people actually responsible for AIG's current state are in retirement and are unaffected by the new tax. But we're punishing a bunch of people who were not responsible for mismanaging the company and leaving the real culprits alone.
Just one more reason we don't need politicians running the economy.