Marie Cocco: If You’re a ‘Little Guy,’ a Contract Means Nothing

[marmar]

from Truthdig:




If You’re a ‘Little Guy,’ a Contract Means Nothing

Posted on Mar 19, 2009
By Marie Cocco


With due deference to George Orwell, all contracts are equal. But some contracts are more equal than others.

Contracts entered into by the hotshots at American International Group for $165 million in bonuses, signed just months before their web of financial cunning unraveled, are inviolate. Contracts entered into by shop-floor workers at auto plants must be renegotiated, so that the taxpayers who bail out the industry don’t coddle supposedly overpaid union members.

Contracts that secured “retention” bonuses for the same wizards who engineered the flimsy financial products that helped bring down the world economy went to 73 individuals who received $1 million or more—with the top honcho getting $6.4 million. Contracts that secured retiree health benefits for autoworkers with creation of a special trust are being rewritten so that carmakers can use their own cut-rate stocks, not cash, to help fund their obligation to elderly people who once worked on assembly lines.

Contracts that were crafted at AIG early in 2008—a few months before taxpayers sent their first installment of bailout money to the insatiable insurance giant—must stand. The deals guaranteed that some bonus recipients would lock in as much money as they had received in 2007, before the company’s downward spiral.

Contracts agreed to by the United Auto Workers in 2007 trimmed wages and created the controversial trust for retiree health benefits that allowed the automakers to effectively remove some costs of the promised benefits from their own balance sheets. That contract does not stand.

As just renegotiated by Ford—which didn’t take federal bailout money—and the UAW, workers gave up cost-of-living adjustments, two years of “bonuses” they’d been promised instead of wage hikes, vacation days, break time and other benefits. Rules are to be changed so that workers can stay on the job more than eight hours in variable shifts, without being paid overtime. ........(more)

The complete piece is at: http://www.truthdig.com/report/item/20090318_the_more_things_stay_the_same/

[yurbud]

1. you could add teachers contracts to that too with Obama's education proposal

[lib_wit_it]

2. Same as it ever was. Same as it ever was. K&R

[yellerpup]

3. Show me any contract between the US government and any tribe in the USA

that was ever honored by the government. AIG executives certainly do not deserve better treatment than the indigenous people of this continent who were screwed every time on every contract, no exceptions. Systematic extinction of AIG executives would work roughly the same way it did with the tribes in that all of their heirs would be dispossessed as well. :nopity:

[Mithreal]

4. And who is in charge while the unions continue to be crushed?

And it even accelerates?

EFCA may make up for some of this betrayal.

[Laelth]

5. It doesn't matter who you are.

Freedom to contract is protected by the Courts at low scrutiny. All the government has to have is a rational basis for infringing upon this right, and it will be allowed.

"Freedom to contract" is what Republicans used to fight the minimum wage in the FDR era. The Supreme Court struck down the first minimum wage law because it violated freedom to contract. People had the right to work for nothing, if they wanted, and the government was not allowed to infringe upon this right. FDR had to threaten to add new members to the Supreme Court to get this ruling reversed so that he could protect workers. Eventually, the Court changed its tune, and now "freedom to contract" can easily be abridged by the government. All the government needs is a rational basis and it can interfere with any contract.

We would likely win in Court if we just refused to give AIG's executives any bonuses. We own 80% of the company anyway. The whole "freedom to contract" argument is a smokescreen.

:dem:

-Laelth

[Uncle Joe]

7. I believe fraud could be used as reason to void this contract.

"Contracts that were crafted at AIG early in 2008—a few months before taxpayers sent their first installment of bailout money to the insatiable insurance giant—must stand. The deals guaranteed that some bonus recipients would lock in as much money as they had received in 2007, before the company’s downward spiral."

I believe the people at the top were well aware of the company's downward spiral and that the government would be caught between a rock and hard place to bail them out, being as they were "too big to fail" without serious or as promoted catastrophic economic consequences. So by giving them selves bonuses in light of the above, they with premeditation swindled the U.S. Government.

[bertman]

6. Too late to rec, but thanks for posting this, marmar. It is so true.