Obama’s chief economics advisor – Larry Summers – said that AIG’s hundreds in billions of bonuses had to be paid because:
We are a country of law. There are contracts. The government cannot just abrogate contracts.
The Revolutionary War was waged to fight taxation without representation.
What are the bailouts other than taxation without representation? Taxpayer money (directly or through inflation) will be used to pay off government debts incurred to bailout AIG, Citigroup, Bank of America, and everyone else.
The Constitution is the founding document of the United States, and all other laws are secondary to the framing document.
And as a former high-level savings and loan regulator, William Black, points out out in an email to Yves Smith:
[Treasury’s bailouts of AIG are] the consequence of six things on the Treasury end of things:
(2) the failure to expose, and to the extent possible, remedy through restatements the massive accounting fraud that AIG was/is engaged in that triggers the bonuses
(3) the failure to bring criminal charges against the control frauds
(5) the weakness of Treasury’s current lawyers who, if press reports are accurate, couldn’t think of any way for the U.S. government to take effective action against what it reportedly views as a scandal….
Remember that covering up a crime committed by someone else is itself a crime:
“Whoever, knowing that an offense has been committed, receives, relieves, comforts or assists the offender in order to hinder or prevent his apprehension, trial or punishment, is an accessory after the fact; one who knowing a felony to have been committed by another, receives, relieves, comforts, or assists the felon in order to hinder the felon’s apprehension, trial, or punishment.”
Are we a nation of laws, Mr. Summers?
If so, stop bailing out AIG, and Citigroup, and Bank of America and all of the other financial giants who are looting America.
If so, insist that the criminal schemes of the heads of these financial giants are prosecuted to the full extent of the law.
See also this.