AIG Bonuses

A lot of sturm und drang about AIG bonuses in the last day or two.
In yesterday's New York Times, Andrew Ross Sorkin wrote a piece to make the case for why we must pay the bonuses to AIG:
1. Sancity of Contracts - employees have airtight contracts that guarantee bonuses.
Answer: When the government became an 80% shareholder in the company, the contracts meant nothing. I don't know about the legality of that, but it seems reasonable that when you get a new boss, new rules are put in place. The new rule is, you get bonuses when we say you get bonuses.
2. Breaking the contracts would set a precedent that other companies would take advantage of.
Answer: Hypothetical fear-mongering. I think that's an illegitimate argument in defense of bonuses.
3. "A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it."
Answer: Really? That's a reason to pay people bonuses? That may be a reason not to fire someone (I don't concede it is, only for the sake of this argument I accept it could be), but its hardly a reason to give people MORE money. It may take people longer, but I suspect there are one or two people who could get everything unraveled.
4. If the employees don't get bonuses, and because of that, leave the company, "they might simply turn around and trade against AIG's book. Why not, they know how bad it is. They built it."
Answer: Wow - and these are the kind of people you think we should not only keep around at the company, but also give more money to them so they'll STAY at the company? If their morality and integrity is that shoddy, then we've got more problems than paying them money will solve. The author is showing his cynical view of the world. Sad for him. Hey Andrew - there are good people in America you know. Some of them even live in New York City and work on Wall Street. Some AIG employees might even be good people outside the clutches of a bad leader who developed a company with bad rules. Give them a good leader and good rules, and they'll be good too. I may be underestimating the depravity of Wall Street employees, but you might be underestimating the desire of most people to live and work in a sane world.
Besides, whether we give them a bonus or not, many employees are probably leaving AIG anyway.
6. Retaining the best and brightest.
Answer: The best and the brightest don't have any use to me if they aren't also people of integrity and character. I'll allow that they played along to get along under a bad system (they might still be redeemable), but if not getting bonuses is enough to drive them away from the company, good riddance to bad rubbish.
7. Employee "compensation is subject to continued and arbitrary adjustment by the US Treasury."
Answer: All we're saying is don't pay bonuses. Again, fear-mongering. The CEO of AIG Edward Libby (who made the statement) is trying to create a picture of the government rubbing their hands together in glee because they get to exercise their newfound power over AIG. I see no indication the government is requesting anything other than to stop the employee bonuses this year, and put a cap on executive salary while the company is being supported by the United States taxpayers. Reasonable.

My final conclusion - Andrew Ross Sorkin, your case was not made. Dismissed.