The administration was pretty clearly caught off-guard by the AIG bonuses. "We didn't anticipate this problem when we structured the rescue for AIG," says one official. "In negotiating it, we should have made very clear that if they want this money we have to reopen the contracts. We did that with others." What others? Think of the auto bailouts. In those loan agreements, it said that in order to meet the terms of the agreement the Big Three's labor costs had to meet the average of the transplants. That meant contracts had to be opened and renegotiated before the funds were released, and so they were. The UAW -- that is to say, the workers -- endured deep cuts. In the auto bailout, in other words, the terms of the loan were constructed to address the problem of overpaid workers. Those workers made around $60,000 a year. In the AIG bailout, the terms of the loan were not constructed to address the problem of overpaid workers. Those workers make $160 million in bonuses. The reason for this is haste rather than malice: The AIG bailout was a rapid effort to avert economic collapse. It was meant to address insolvency, not labor costs. But the contrast remains striking.
