"We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system."
This is Larry Summers' comment on the AIG bouses. We will start here.
According to Summers and Treasury Secretary Geithner, AIG will pay out over $100 million in bonuses, mainly towards its Finacial Products division, and there is nothing that can be done about it. Says who? Who has seen these contracts? I haven't. Has Geithner? Has Obama? Until, we see the contracts, how do we know? I, for one, am not willing to take AIG's word on this, not after what has happened.
Here is what I suggest: the contracts be published publicly. At this point, the Treasury offers a reward (a bonus, you might call it) , a mere fraction of $100 million (say one million dollars) , to the first person who can come up with a legally effective way to nullify the contracts, saving AIG and the taxpayers $99 million. There's a whole bunch of capable out-of-work attorneys out there who are willing to take a crack at the problem on spec.
The person who finds the solution then replaces Larry Summers who obviously has business working in government during such a difficult time. It is beyond his capabilities.
