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Welcome to double-standard America
From: David Farber <dave () farber net>
Date: Sun, 22 Mar 2009 11:50:18 -0400



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From: dewayne () warpspeed com (Dewayne Hendricks)
Date: March 22, 2009 4:48:44 AM EDT
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] Welcome to double-standard America

Welcome to double-standard America
The AIG scandal has made it apparent that we are ruled by a government of men, not laws.
By David Sirota

Mar. 21, 2009

<http://www.salon.com/opinion/feature/2009/03/21/sirota/print.html>

United Steelworkers president Leo Gerard likes to say that Washington policymakers "treat the people who take a shower after work much differently than they treat the people who shower before they go to work." In the 21st century Gilded Age, the blue-collar shower-after- work crowd is given the tough, while the white-collar shower-before- work gang gets the love, and never before this week was that doctrine made so clear.

Following news that government-owned American International Group devoted $165 million of its $170 billion taxpayer bailout to employee bonuses, the White House insisted nothing could be done to halt the robbery. On ABC's Sunday chat show, Obama advisor Larry Summers couched his passive-aggressive defense of AIG's thieves in the saccharine argot of jurisprudence. "We are a country of law -- there are contracts (and) the government cannot just abrogate contracts," he said.

The rhetoric echoed John Adams' two-century-old fairy tale about an impartial "government of laws, and not of men." Only now, the reassuring platitudes can't hide the uncomfortable truth.

Last month, the same government that says it "cannot just abrogate" executives' bonus contracts used its leverage to cancel unions' wage contracts. As the Wall Street Journal reported, federal loans to G.M. and Chrysler were made contingent on those manufacturers shredding their existing labor pacts and "extract[ing] financial concessions from workers." In other words, our government asks us to believe that it possesses total authority to adjust contracts at car companies it lends to, and yet has zero power to modify contracts at financial firms it owns. This, even though the latter set of covenants might be easily abolished.

According to New York Attorney General Andrew Cuomo, these allegedly inviolate AIG agreements promised bonus money the company didn't have and were crafted by executives who knew the firm was collapsing, meaning there is a decent chance these pacts could be invalidated under "fraudulent conveyance" statutes. They also might be canceled via "force majeure" clauses allowing one party to rescind a pact in the event of extraordinary circumstances -- like, perhaps, the collapse of the world economy. (Note: BusinessWeek reports that corporations are already citing the recession as reason to invoke such clauses and nix their business-to-business contracts.)
[snip]
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