Quote:
Originally Posted by Daradon
Obviously you've never been screwed on a contract.
If the person owing you can't pay, it don't matter. If AIG had not received the bailout, they wouldn't be able to pay. The fact that the were bailed out changes everything on the books at that point because if they weren't, there wouldn't even be books, jobs, bonuses to discuss.
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I hear what you are saying but don't think the analysis holds up. If the homebuilder has a contract with the roofing supply company and the housebuilder goes under the contract is gone. But if another company buys the housebuilder, they have to honor the contract. The fed is the company that buys the housebuilder, or perhaps more accurately, the finance company that offers a line of credit to keep the housebuilder in business. Another difference though is that AIG has tons of assets and would not just disappear. They would declare bankruptcy and the process would in fact protect the employees, to a certain extent. The fact the feds put no conditions on the bailout is where the blame lies. The electricity company will still want to be paid. As will the landlord for their offices and the leasing company that supplies the computers. All based on contracts.