I’ll be brief.
Back in December when it was the Big 3 automakers instead of Wall Street criminals financial institutions, one of the big sticking points on a proposed bailout was the requirement that the UAW contracts be revised so that the autoworkers (who earn an incredibly small amount as compared to many of the financial institution employees – especially those who are receiving insane bonuses for driving the respective companies into the ground) would have to give up more and earn less:
Corker -- a freshman senator who a few years ago was mayor of Chattanooga -- was a strong opponent of the White House's plan to save the automakers.
He and other Republicans had revolted against the earlier plan because they thought it did not go far enough in forcing contracts on the UAW. GM officials have told Congress, for instance, that under the most recent contract, wages would be about $62 per hour in 2010, including about $30 per hour in wages and more than double that in benefits to current workers and retirees.
Some Republicans said they doubted the automakers could remain viable and return to profitability. Others, frustrated with the Treasury's financial rescue program, were skeptical of approving another bailout.
But now that the contracts are with friends and companies who have rubbed elbows with those responsible for doling out billions of dollars in bailout money (with a stunning lack of oversight or accountability), we hear the following:
Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them...
...The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken. The official noted that even a provision recently pushed through Congress by Senator Christopher J. Dodd, a Connecticut Democrat, had an exemption for such bonus agreements already in place.
Now, I was a big fan and an early supporter of Senator Dodd in his run for President, but he should explain himself here – just as Geithner, Summers and anyone else involved in this process. And if Dodd did insert a provision that exempts such bonuses, then we should know why this was inserted for the financial services industry but not for existing contracts for the UAW.
Why is it that the hundreds of thousands of UAW members have to make concession after concession in order to get a small amount of relief (regardless of whether any bailouts should be warranted – but that is an issue for another diary and another diarist who knows way more than me about that), but the same banks that are using bailout money to fight against the Employee Free Choice Act or to pay ridiculous bonuses to undeserving employees get a free pass?
If the asinine "best and brightest" excuse is the best that AIG and other financial institutions can come up with, then I’ll settle for less than the best or brightest and take competent.
More importantly, if contracts can be changed or forced to be renegotiated in exchange for free money that is funded by We the People, then that should hold true for the AIGs and Citicorps and Bank of Americas if they are to hold true for hundreds of thousands of struggling working families in the auto industry.
Otherwise, the Obama administration risks a tremendous backlash and erosion of trust in how it handles the economy and the growing perception of favoritism.