Back in the spring, the Obama administration had no problem insisting that union autoworkers give up some of the health care benefits that they were entitled to in their contract. In some cases, workers had already put in more than 30 years earning these benefits. Note that this was before any of the manufacturers went into bankruptcy.
While these workers were forced to make large concessions on contractually promised benefits, we are told yet again that AIG, an effectively bankrupt company, has a contractual obligation to pay big bonuses to its top executives and traders. It would be interesting to hear why this would be the case and if it is legally committed, why shouldn’t the company just go into bankruptcy now that the immediate post-Lehman panic is over.
Dean Baker: Why Are Contracts for AIG Execs Different Than Contracts for Autoworkers?
The question answers itself.