The more important point of outrage behind the AIG bonuses

Yes, yes, by now, we've all heard: AIG paid $165 million in bonuses to many of its workers, including some who are suspected of being behind the products that are a major cause of AIG's meltdown. Some people got multi-million dollar bonuses, including some that no longer work for AIG. The company claims it was legally obligated to do so because the bonuses were contractually guaranteed.

I will spare you a long tirade about my outrage that these bonuses are being paid to the greedy morons who got us into this mess by average folks, many of whom no longer are employed or have faced significant cutbacks in income due to the economic fallout of this debacle. It's not that I'm not outraged; it's that almost everyone is outraged, and thus, you (and all the rest of us) have all heard it before.

There is, however, something even more outrageous than the fact that these bonuses were paid. It is the fact that they were paid due to contractual obligations.

We need a major reform of contract law in this country. Today, it is set up to favor the strong and wealthy over the weak and poor (or relatively poor). This system is unfair and unsustainable.

Take for example UAW. The Big 3 need federal bailout funds, but one of the conditions being imposed upon them is to "renegotiate" labor contracts in order to obtain wage cuts, benefit cuts, and most of all, cuts to benefits promised to past workers.

But wait. UAW had a contract, right? It's impossible to break contracts, right? Apparently not, so long as the parties taking it in the shorts due to the contract break are the average worker bee, and not a "genius" derivatives trader.

A contract basically consists of the following:

-Mutual Consent
-Offer and Acceptance
-Mutual Consideration
-Performance/Delivery
-Good Faith
-No Violation of Public Policy

Now, think about the last time you got an (unsolicited, likely) offer from Citibank or some similar company for a loan. The back of the check probably said something like "By cashing this check, you agree to be bound by our Terms." If you were lucky, they may have including their "Terms" in the same solicitation, and told you what interest rate they would charge, what fees they'd assess, whether or not they would force you to give up your Constitutional right to a trial by jury for civil matters, etc. If you weren't lucky, you were told that you'd get the terms AFTER you agreed to them by cashing the check.

Now, think about the reverse. Let's say you send a check to Citibank, and you write on it "By cashing this check, you agree to lower my interest rate to 2%, assess no further fees on my account, and agree that arbitration is voluntary, not mandatory." Would your "contract" be held up in court? No. Large corporations are not held responsible for reading the terms presented with a check from an individual consumer. Without being responsible for reading the terms, the corporation is assumed not to have agreed with them when cashing the check.

This is not fair. Either a contract is a contract is a contract....or it isn't. If the average citizen cannot enforce contract provisions, then frankly, the whining about "allowing bankruptcy judges to restructure mortgage terms would deal a fatal blow to contract law" needs to stop.

The Big 3 made wage and benefit agreements, and then purposefully chose to not fund them at the time of the agreements. Now they don't have enough money to do so profitably. Big shocker. If I made an agreement to pay $X to someone in the future, I better start saving for that future date now. Waiting until the day it's due and saying "Oh no, you guys are at fault for my poor financial situation" is bunk. Paying a CEO 800 times the average worker, and then demanding that the average worker take even more pay cuts is bunk. Paying a CEO 800 times the average worker and then demanding that the worker accept wages and benefits comparable to a company where the CEO is paid 8 times the average worker is bunk. And these bunk excuses do not warrant a mandated breaking of the UAW contract. The contract was negotiated and agreed to by both parties. The contract meets all the terms of a contract. The contract should stand.