While I am as disgusted as all those pontificating politicians about the AIG bonus issue, there is a greater issue than this additional instance of unfairness, and that is the sanctity of contracts.
While contracts can be set aside for a few narrow reasons, this is not one of them. Even worse, over-turning these contracts will have a very chilling effect on dealing with the many other financial problems we face, because the private sector won’t trust the contracts they negotiate.
The TALF plan is dependent upon contracts with funds to clean up the toxic assets. Would you want to do business with the Federal government, to help clean it up, when you don’t know if the contract will be honored or not?
Revenge may be sweet, but it has a bitter aftertaste!
