Summers Day

Yesterday, they were victims again, and there was nothing much the Obama administration could do about the fact that AIG is paying out millions in retention bonuses to the exact fools who brought the company down. Obama economic adviser Larry Summers told Bob Schieffer that
Secretary Geithner has negotiated very forcefully with AIG, and he has done everything that is legally permissible for the government to do to limit the payment of bonuses. But...  we're not a country where contracts just get abrogatted willy-nilly...
That was yesterday. Today, in response to a national rage, the President decided to pivot.
"How do they justify this outrage to the taxpayers who are keeping the company afloat?"
No, Mister P, how do you justify your decision over the weekend to go along with the scam?
"Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," Obama said today during a news conference announcing an aid program for small businesses.
Mr. Obama has ordered the Treasury Secretary to "pursue every single legal avenue" to block the bonuses.
"This isn't just a matter of dollars and cents. It's about our fundamental values," he said. "All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million-dollar bonuses. All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."
That's right. And it's something that should have been just as clear to you on Sunday as it is today.
The easy thing would be to just say, you know, off with their heads; violate the -- violate the contracts. But you have to think about the consequences of breaking contracts for the overall system of law, for the overall financial system.
So said Summers. But that was yesterday.