Pill-AIG-ing the Strength of the American Economy
So with the recent revelations that AIG is spending close to half of its $170B worth of rescue money on foreign obligations, and about $150M on bonuses for certain executives and employees has come frighteningly unified excoriation from practically every corner of American Culture.
Francis Cianfrocca, a businessman and investor based in New York City, and the CEO of Bayshore Networks, LLC has written a fairly considerate opinion of such a kind on CommentaryMagazing.com, an opinion despite its thoughtfulness with which I still almost wholly disagree (actually, see the comment below for a revision). Why?
What did people think AIG was going to do with the money given them so they would not go bankrupt? The reason to keep a company from going bankrupt is simply so that they will honor their contracts.
And American law is only as valuable to the future and the economy as it is an enforcer of contracts. Rewriting or creating laws now so that, for example, 91% of AIG bonuses will be confiscated as taxes will reduce American law to the kind of legal chaos which to this point only exists in the countries we used to call under-developed.
AIG’s offense to the American (and world) economy will be nothing compared to the consequence of undermining confidence that American contracts will be honored by law. Make it possible for contracts to be legally broken retro-actively, or make it possible for laws to be written targeting only certain participants in the economy—then we will understand the meaning of pillaging the American economy.
Tags: Economics
I thought you were going to have a stroke this afternoon! And you are so right, and people buy into what they are doing so readily. How will they feel when the government tells them they can’t have their bonus they have worked hard for, so they can spread the wealth to the struggling citizens? There is a reason god calls us sheep, we’re just more like Little Bo Peep’s sheep. Wasn’t there a guy on TV or radio who used to say “Wake up, Amerka!”?
You go!
Having now discussed his article and views with him on air I realize I mis-characterized Mr. Cianfrocca’s position. We are much closer in our positions than I anticipated. My view is accurately reflected above. I encourage others to read his view for themselves. He is very smart and solidly committed to the free market.