Tuesday, March 17, 2009

Why Obama fears AIG “backlash”

From the World Socialist Website (!):

AIG's plan to award hundreds of millions of dollars in bonuses to the financial wizards responsible for bankrupting the company is an "outrage," Barack Obama declared on Monday. The US president said he had instructed his treasury secretary to "pursue every single legal avenue to block" them. He suggested the government had some "leverage," a remarkable understatement given that it now owns 79.9 percent of AIG's shares and has bailed out the insurance giant to the tune of nearly $180 billion and counting.

Obama's feigning of fury over the AIG bonuses came only one day after his leading economic advisors insisted that in a "nation of laws" and given the sanctity of contracts nothing could be done about these bonuses, no matter how "outrageous" they might be.

Lawrence Summers, director of the White House National Economic Council, declared in a CBS television interview, "The easy thing would be to just say, you know, ‘Off with their heads,' and violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law."

With this turn of phrase invoking the guillotine, Summers inadvertently put his finger on an essential element of the AIG bonuses furor. Like the nobility at the time of the French Revolution, America's ruling financial oligarchy is an entirely parasitic social layer, whose relentless defense of its wealth and privileges stands as the basic impediment to meeting the most basic needs of society as a whole....MORE