By Robert Schlesinger, Thomas Jefferson Street blog
I wrote earlier that the AIG "bonus babies"—the derivatives traders who got AIG, and by extension the rest of the world economy, mired in this mess—should cease collecting paychecks, let alone bonus checks. I see that Atlantic 's Marc Ambinder also has a pretty good idea for dealing with the bonus babies: Make them sue for the money.
Financial products brought the firm down; why hasn't AIG informed the people in that unit that if they want their bonuses, they're going to have to sue to get them?
In other words, if the collapse of the company is an insufficient condition on which to base the breaking of a contract, then the contracts themselves aren't worth anything to the company.
What's the worst that could happen? The "bad guys"—the derivative traders—would take AIG to court. But forcing the traders to sue for the money they don't deserve turns them into the villains here, as they'd be named plaintiffs.
That circus would be worth the price of admission in terms of entertainment value alone. Some AIGers, Ambinder correctly predicts, would be shamed into dropping their bonus claims. But you've got to figure that the show would produce at least one memorably odious character that would defend the right to insane bonuses.
In the meantime, AIG CEO Edward Liddy is expected to testify before Congress on Wednesday. Maybe he can address these ideas.
(Thanks to TNR's Michael Crowley.)
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