A Government of Men, Not Laws

United Steelworkers President Leo Gerard
likes to say that Washington policymakers "treat the people who take a
shower after work much differently than they treat the people who
shower before they go to work." In the 21st century Gilded Age, the
blue-collar shower-after-work crowd is given the tough, while the
white-collar shower-before-work gang gets the love, and never before
this week was that doctrine made so clear.

Following news that government-owned American International Group
(AIG) devoted $165 million of its $170 billion taxpayer bailout to
employee bonuses, the White House insisted nothing could be done to
halt the robbery. On ABC's Sunday chat show, Obama adviser Larry
Summers couched his passive-aggressive defense of AIG's thieves in the
saccharine argot of jurisprudence. "We are a country of law - there are
contracts (and) the government cannot just abrogate contracts," he said.

The rhetoric echoed John Adams' two-century-old fairy tale about an
impartial "government of laws, and not of men." Only now, the
reassuring platitudes can't hide the uncomfortable truth.

Last month, the same government that says it "cannot just abrogate"
executives' bonus contracts used its leverage to cancel unions' wage
contracts. As the Wall Street Journal reported, federal loans to GM and
Chrysler were made contingent on those manufacturers shredding their
existing labor pacts and "extract(ing) financial concessions from
workers." In other words, our government asks us to believe that it
possesses total authority to adjust contracts at car companies it lends
to, and yet has zero power to modify contracts at financial firms it
owns. This, even though the latter set of covenants might be easily
abolished.

According to New York Attorney General Andrew Cuomo, these allegedly
inviolate AIG agreements promised bonus money the company didn't have
and were crafted by executives who knew the firm was collapsing,
meaning there is a decent chance these pacts could be invalidated under
"fraudulent conveyance" statutes. They also might be canceled via force majeure
clauses allowing one party to rescind a pact in the event of
extraordinary circumstances - like, perhaps, the collapse of the world
economy. (Note: BusinessWeek reports that corporations are already
citing the recession as reason to invoke such clauses and nix their
business-to-business contracts.)

But, then, those legal cases require a government that treats AIG's
shower-before-work employees with the same firmness that it treats the
auto industry's shower-after-work employees, not the government we have
- the one that believes "the supreme sanctity of employment contracts
applies only to some types of employees but not others," as Salon.com's
Glenn Greenwald says.

Mind you, this double standard works the other way, too.
Congressional Republicans have long supported the laws letting
bankruptcy courts annul mortgage contracts for vacation homes. Those
statutes help the shower-before-work clique at least retain their
beachside villas, no matter how many of their speculative Ponzi schemes
go bad. But for those who shower after work, it's Adams-esque bromides
against "absolving borrowers of their personal responsibility," as the
GOP announced it will oppose legislation permitting bankruptcy judges
to revise mortgage contracts for primary residences.

Certainly, for all the connotations of fairness inherent in
American politics' "country of law" catchphrases, most of us know that
the selective application of legal principles is as old as the
Republic. However, lots of us are only now discovering that inequality
is so pronounced that the time of day we bathe determines the
enforcement and reliability (or lack thereof) of even the most basic
contracts. We are just realizing that for all the parroting of
America's second president, we are ruled by a government of men, and
not of laws.