I usually agree with, or at least find somewhat convincing, Andrew Ross Sorkin at DealBook in The New York Times. Here’s his take on why we should be OK with the bonuses.
His throw-away line that the auto unions “negotiated” changes in their contract and didn’t have them altered unilaterally misses the point that they were forced to change their contracts. OK, fine, let’s “negotiate” with these folks at AIG Financial Products, name them publicly and let folks run TV ads against them, and see how things turn out. In the end, that’s basically what Sorkin recommends:
Mr. Cuomo wants to know who A.I.G.’s lucky employees are, and how they have been doing at their jobs. So here is a suggestion for him. Get the list, and give those big earners at A.I.G. a not-so-subtle nudge: Perhaps they will “volunteer” to give some of their bonuses back or watch their names hit the newspapers. But in the meantime, despite how offensive and painful it might be, let’s honor the contracts.
So, why kick the auto union example in a throw-away parenthetical if it’s basically your model for how to handle this?
My problem is that, unlike the unions, I question whether these folks at AIG are subject to shaming principles.
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Chris Geidner is the senior political writer at D.C.'s Metro Weekly and has written for The Atlantic Online, Advocate.com, Salon and other publications, as well as at his blog, Law Dork. Prior to moving to D.C. in 2009, he served as an attorney on the senior staff at the Ohio Attorney General's Office and had earlier worked for a leading Columbus law firm. An extended biography can be found
You might have misunderstood his union example, as he didn’t make it clearly. The negotiation between the auto unions and the manufacturers is based on the continued survival of the companies and thus of the unionized workers’ livelihoods. The auto workers aren’t getting snapped up by Toyota and others in the same industry. If the unions don’t give a little, all their members are going to be unemployed. In contrast, apparently these bonus-winners are ready to walk away from AIG — and in what I thought was the really f***ed up part of Sorkin’s argument, go to work undermining AIG’s stability for another entity’s profit, thanks to their insider knowledge of its problems. I’m writing a post about how accepting Sorkin, the WaPo editorial board and others seem to be about the fact that we’re basically being blackmailed by the AIG folks: either we pay them through the nose, or they screw us over by going to firms that will make a buck off undercutting AIG.