Francis, the AIG bonus scandal has followed the twists and turns of a poorly crafted screenplay. As soon as a character finally does the obvious thing, the movie should be over. In this case, though, no one did the obvious. We are told the Fed, Tim Geithner, and outside lawyers all looked at the employee bonuses and said, “Yup — these guys have contracts!”

And yes, good old Chris Dodd gave AIG a little help via a legislative goody to “protect” certain bonuses from government meddling. But nothing prevented AIG from going back to employees for a “voluntary” resolution. People do it all the time — when their company and jobs are on the line.

Here, however, there was apparently a moratorium on common sense. The obvious move for Geithner and the Fed was to tell AIG to go back to potential bonus recipients and work out a deal to delay or cancel their payments. In fact, a limited group of 43 executives was treated to this approach. But no one thought to do it for everyone — or to negate bonuses entirely? It is not surprising that the Republicans are going in for the kill.

This is not a legal issue. This is a stupidity issue.

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This entry was posted on Tuesday, March 17th, 2009 at 3:43 PM and is filed under Contentions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.