I wonder if I'm alone in my perception of the recent moves by our government. I can't help but think that there is alot of emotion behind so much of the recent legislation in the tax bailouts and such, and believe the policy of making laws based on feelings will alter how far we are willing to go against the Constition. I understand the outrage at what taxpayer money (Actually, I don't think of it as "tax-payer" money, I think of it as Our Money, because my children don't pay taxes...) is being used for, but I really don't think that this quick legislation is the answer. In point of fact, if the legislation hadn't been rushed out this probably wouldn't have happend in the first place. That being said, I for one see a continuation of the previous administrations policies in the way we act without waying the consequences. I do not see near enough discourse going on within the Government. I don't believe that any real discussions of differing ideas has taken place in the previous 100 days and I doubt it will bode well for how much discussion is going to take place on the rest of the Obama Administrations agenda.

http://firstread.msnbc.ms...43705.aspx

http://www.techlawjournal...ainder.htm

http://www.ashbrook.org/p.../1974.html

Uh oh ... another tax thread. We all know where this leads.

(Here's a hint: lots of ellipses, shouting and exclamation points. )

I hope not. Emotions are getting way to much say everywhere else, I was hoping to keep this a calm slow discussion...

One of the most disturbing examples of mob rule I've ever seen in Washington. The Republicans who split from principle to vote for this piece of garbage are shameless. Haven't heard who they were yet. Of course pretty much all the Democrats were in on it too.

Constitution Schmonstitution. We've got news cycles to win!

In what may be another alarming trend, I find myself agreeing with Rick. The "bonus tax" idea is knee-jerk at best.

The thought of massive bonuses sickens me, but slapping a punitive tax on them shouldn't be the answer.

The source of the problem is that AIG and the FRB haven't dealt with the whole bonus/retention pay stuff in a responsible way. Instead they chose to try to justify it with ridiculous rationales like:
A) We need to retain the best and the brightest -- (they were joking when they said that, right???)
B) We are contractually obligated to make these payments --- (but if GM's labor contracts weren't holy, then AIG's exec contracts aren't either, right?)
C) We'll pay them back voluntarily --- (oh ya, that tactic always works...)
D) We need to keep these shysters at AIG so they won't take AIG's trade secrets (i.e., "national economy destroying practices") to other banks and cause similar problems there -- (hey, if they do that, then wouldn't it be legal to shoot them on sight?)

I agree that taxing bonuses is silly and punitive and total sideshowmanship - but what choice were we left with? And besides, what could be sillier than calling these payments "bonuses" in the first place?

So here's a simple solution. Just use correct terms. The payments aren't 'bonuses' - they're 'theft'. And since it's theft, getting the money back isn't 'taxation' - it's 'restitution'.

Presto Chango - Problem solved.

So here's a simple solution. Just use correct terms. The payments aren't 'bonuses' - they're 'theft'. And since it's theft, getting the money back isn't 'taxation' - it's 'restitution'.

Presto Chango - Problem solved.

Testify, brotha! Testify!

It actually sounds like it will pass constitutional muster. I was reading some intresting stuff on the original intent of the constituion was to limit the Fed Gov from spending tax payer money on state pork. How I wish we could go back and revisit this issue and undu it.

Oh, by the way Steve (and Brian), as much as I emotionally agree with your sentiment, that is exactly why we need to see that this is in fact a violation of the Constitution: Congress is passing a law to punish a criminal without a trial. Am I silly for looking at the intent of the law? The Judicial system was setup specifically to have the power to try criminals, and yet for some reason we have been willing to do things like this that are obviously about "punishing" a "crime" without due process. The defacto part is in making it a crime after the fact, we are just using the Tax laws to go around our intent. Again, I am trying to see where this is taking us. Seeing what has gone in the evolution of our Government, I am very concerned. Anyone see any similarities to the discussions that took place before the "War on Iraq?" This carries alot of the same emotionalism behind it.

D) We need to keep these shysters at AIG so they won't take AIG's trade secrets (i.e., "national economy destroying practices") to other banks and cause similar problems there -- (hey, if they do that, then wouldn't it be legal to shoot them on sight?)

Wouldn't AIG want their "best and brightest" to take their "trade secrets" with them to other companies? One would think that the best way to destroy the competition would be to give them the people who have already destroyed one company. They've already got the know-how.

pdb - I agree with you and I support NY-AG Cuomo's very diligent and conventional approach to investigating what went on, who knew about it, and when they knew about it. But I also think we (the American tax-paying public) have a right to expect a higher order of conduct from the folks at AIG (and other bailed out companies) - especially from the highest level executives - whether that conduct is codified or not. Most people know right from wrong. The fact that these bozos don't is obviously how we got into the mess - and if it takes extreme measures to get them to accept the fact that things are different today than they were a year ago, then that's their fault, not the taxpaying public. And if Congress has to take a draconian measure, I'm OK with that as long as it is done openly and passes constitutional muster. As for the rest of it, I'm just having a little logical fun - we laugh not to cry, as they say in Brazil.

Brian - Great point!

I would like any and all bailout funds to come with the strongest strings possible.

Something along the lines of a "Got-you-by-the-balls" clause.

Greed Oversight is good.

I'm not a fan of the "bonus tax."

It just gives Congress the opportunity to pose as populists.

More to the point, this is not the type of legislation that should be passed by Congress.

One of the most disturbing examples of mob rule I've ever seen in Washington. The Republicans who split from principle to vote for this piece of garbage are shameless. Haven't heard who they were yet. Of course pretty much all the Democrats were in on it too.

Constitution Schmonstitution. We've got news cycles to win!

------------

Remember Terri Schiavo?

I agree with Rick. (This is so embarrassing.)

Pretty hamfisted way to deal with something that should have been spelled out in the original legislation. Sets a bad precedent.

Classic.

"We didn't read the law we just passed, so to make up for it, we're going to wipe our asses with that whole Bills of Attainder and Ex Post Facto stuff in the Constitution. Oh, that guy who approved the bonuses and wrote them into the bill we passed and oversees all this banking mumbo jumbo for us? He's a good enough guy. No blood no foul"

Today it's the evil AIG execs. Tomorrow it's those "profiteering" oil companies. Tobacco. Alcohol. Firearms manufacturers. Then onto pharma, and probably those evil light bulb manufacturers.

You'd better earn your money in a popular way, or we'll confiscate it. Investors, time to get your money out now. The inmates are officially in control of the asylum.

Why am I not surprised that there is no mention of Dodd nor Geitner in this thread? Smoke and Mirrors anyone?

Rick:

I agree with you.

Lose the straw man schtick, please. Cripes.

Her you go Ike, I'll put Geithner's name on it for you.

David Sirota-
"I've never been a fan of Treasury Secretary Tim Geithner - he's a Rubinite who has been too close to Wall Street, and too focused on using government power to protect private shareholders. This is the guy who told the Senate that his primary goal in bailing out the financial industry with public money was not to protect the economy or taxpayers, but instead to use our taxpayer dollars to preserve "a financial system that is run by private shareholders [and] managed by private institutions." Despite my strong disagreements with his ideology, only today have I gotten to the point where I think it's clear he needs to be fired. Why? Because today he proved he's either lying to the public or totally incompetent.
David Sirota :: Lying Or Incompetent - Either Way, Geithner Needs to Be Fired
Two stories explain why I say this. Here's the first, showing us how Geithner insists he only found out about AIG's bonuses a week ago:

WASHINGTON (CNN) - A new timeline released by White House officials late Tuesday evening reveals the president first learned about the $165 million in AIG bonuses last Thursday...The new timeline was released after White House spokesman Robert Gibbs said he was unaware of when President Barack Obama first learned of the bonus controversy and reporters asked that the White House provide a timeline. It also shows that Treasury Secretary Timothy Geithner first found out about the bonuses from his staff last Tuesday.
Now here's the Associated Press, refuting this timeline:


For months, the Obama administration and members of Congress have known that insurance giant AIG was getting ready to pay huge bonuses while living off government bailouts. It wasn't until the money was flowing and news was trickling out to the public that official Washington rose up in anger and vowed to yank the money back...The situation has the White House and Treasury Secretary Timothy Geithner on the defensive. The administration was caught off guard Tuesday trying to explain why Geithner had waited until last Wednesday to call AIG chief executive Edward M. Liddy and demand that the bonus payments be restructured. Publicly, the White House expressed confidence in Geithner _ but still made it clear he was the one responsible for how the matter was handled.
For the willfully ignorant who would like to pretend that AP is cooking up this story, recall that AP's story isn't even really "news" in that it is merely corroborating what we already know and what has already been widely reported: the AIG bonus contracts being cited by the administration were signed in 2008, and as the 80 percent owner of AIG, the federal government (ie. the Treasury Department and the Obama administration) have had access to the company's books and contracts for many months. Indeed, even if you believe that only the Federal Reserve bank was told about the AIG bonus contracts, recall that Geithner was a top official at the Federal Reserve bank when the AIG bailout was crafted and when AIG was telling the Federal Reserve about its finances and obligations - and the Wall Street Journal reported that Geithner was intimately involved in the AIG bailout (meaning he had access to their books/contracts months ago).

That means either Geithner is lying to the public by pretending he never knew about the AIG bonuses when, in fact he did.* Or, he's egregiously uninformed/incompetent and therefore absolutely unfit to hold one of the most important economic offices in our country.

This comes on top of Geithner and Summers dishonestly insisting that they are unable to stop the AIG bonuses because of Sen. Chris Dodd's (D-CT) executive compensation legislation that exempted AIG-style bonuses from limits. In fact, as the Wall Street Journal and Hill newspaper long ago reported, Dodd's original bill would have limited such bonuses, but Geithner and Summers specifically forced him to water down his bill because it was "too aggressive." And yet somehow, Geithner and Summers would have us believe the weakening of that legislation - and thus the AIG bonuses - is Dodd's fault, not theirs.

When looked at in sum, what yousee is a Treasury Secretary that is creating a huge economic credibility gap for the Obama administration. He is, in short, undermining Obama's presidency - and it's time for Geithner to go.

* Arguably even worse is the fact that Obama himself knew about the bonuses before the checks were cut, and did absolutely nothing to stop those checks from being cut - but that's fodder for another post altogether.

UPDATE: AP notes that in January 2009, "Reps. Joseph E. Crowley of New York and Paul E. Kanjorski of Pennsylvania wrote to the Federal Reserve and the Treasury Department pressing the administration to scrutinize AIG's bonus plans and take steps against excessive payments." So even if you believe Geithner didn't know about the bonuses from his previous work, he was specifically asked to do the work that would have revealed those planned bonuses as far back as January. He either obliged and did the due diligence that would have revealed the bonus contracts, or he ignored the request. That means, as I said earlier in this post, he's either lying about having just found out, or he's incompetent and didn't fulfill what should be the minimum amount of due diligence when a Treasury Secretary hands over billions to what is effectively a government-owned company."

Here Ike, I'll add some more fodder for you.

"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."

Shipley

Buck, are comparing me to shiply? I guess if I win the lottery I could be some houses near the golf course and store junk cars on them. Have you ever seen the "RED" Grange show?

Watching 60 minutes tonight with the President on it...........I'll be suprised if he signs the "bonus tax" bill. Just my take on how he talked about it.

Good.

Good observation!

Obama's been in office for what, 60 days, and he's going to have to to eat it from his own Party. Ya gotta love it! Harry and Nancy know the "Bonus Tax" won't stand in the courts, but they'll pass their incompetence off to Barry to handle and Barry has to veto it to avoid the endless string of lawsuits which will ensue!

Damn, it's getting good!

If this train wreck keeps rolling, the Democrats will wanting to impeach their own guy!

I'm sure they will get "bipartisan support" on that one!

That's an interesting - er - "thought" Jim. So, you're hopping up n' down with glee at the prospect of impeaching a US president over a policy skirmish.

I ask: Has the man lied and manipulated hand-picked intelligence to wrecklessly commit US troops to pay the ultimate price in a misguided war with no exit plan in a country that had nothing to do with the attack on the World Trade Center? And has he intentionally obfuscated the financial cost of that war by refusing to put forth an honest budget for six years?

Here's some advice. Until your beef with the popularly elected President of the United States reaches THAT level, please don't mention impeachment again. Otherwise, your lack of gray matter will evident for all to see.

"I ask: Has the man lied and manipulated hand-picked intelligence to wrecklessly commit US troops to pay the ultimate price in a misguided war with no exit plan in a country that had nothing to do with the attack on the World Trade Center?"

Did any president do this? What proof do you have? Is it an impeachable offense?

And how does taxing someone else bonus benefit you? Isn't that the class warfare that you non-conservatives claim to despise?

Richard,

You seem to be assuming that I WANT Bush impeached. I don't. I'm satisfied with the fact that 80%+ of Americans finally saw that King George had no clothes. I'll leave it to history to judge him now, because Bush is yesterday's news. It's time to move on and correct the damage he left behind as best we can. I only brought up those issues because Jim was salivating at the thought of impeaching Obama over a POLICY SKIRMISH. Geez!

But, you asked me questions so I will answer them.

1. Most definitely. But why bother explaining because if you don't believe it now, you never will.

2. Yes, but it would take millions of dollars in legal fees (don't ask me why) to document it, months and perhaps years to prosecute a cast based on it, and divert the limited resources of our political process from addressing more important matters.

3. Yes. I can't imagine a "higher crime" -- and it would be an insult to call the commitment to war under suspect circumstances a "misdemeanor".

Holy Moly, Richard. Why did you have to equate a debate about tax policy with "class warfare"??? Now you've gone and made Jim Brady look intelligent by comparison!

There was bi-partisan support for the incursion into Iraq. The motivation was not because Saddam Hussein had something to do with the 9/11 attacks. It was because the belief was he had WMDs. The "intelligence" that he had WMDs was the bodies of dead Kurdish women and children killed in poison gas attacks ordered by Saddam Hussein, and Hussein's overt attempts to thwart the UN inspections.

Back when public opinion favored the Iraqi incursion all the yellow bellied sapsuckers were throwing bricks at Bush for not taking more forceful action against Saddam Hussein. Once the going got tough and the winds of public opinion changed, sure as night follows day, democrats did an about face and started playing the blame game to make themselves look like they were "right" by claiming to having been against it.

The AIG bail out package was rushed through congress wthout the time for anyone to look at it in detail or to debate it. Now they get caught with their pants down and again they are looking for someone to blame for "lying" to them. Are you starting to see a pattern here?

Congress is the only whorehouse in America that loses money.

Thank you, T4TX, for illustrating so well so many of the things that are wrong with entire scenario. And by the way - I'm no defender of Congress. I've gone on record here several times about the need for change in that branch of government, right down to calling for Pelosi and Boehner to resign their leadership posts.

(2nd paragraph removed by me because it didn't advance a civil discussion of the issue)