There’s all this hoopla surrounding the faux Congressional outrage (and media-generated public outrage). While I agree in essence with my brother’s take on it, I have a slightly different response.
I’m outraged.
I’m not outraged that public money was used to pay the $165 million in bonuses. Those were contractually-required bonuses, from what I understand. No, I’m outraged that public money was given to AIG in the first place. I’m outraged that $170 Billion of taxpayer money was given to AIG with no strings attached, no oversight, no direction on how it was to be used, and seemingly no planning.
I’m further outraged that some Congressional Democrats are now calling for a retroactive tax on those bonuses (and bonuses paid out to people working at other companies that took bailout money). Excuse me? Who do you think you are, to change the rules in place after the event has taken place, and penalizing people for something that was fine at the time of the action? The action is complete, the transaction finalized, the taxes taken out and paid (at current rates), the bonuses delivered. If you want to change the rules now, then the new rules apply from here on out.
I’m trying to find a good analogy, but I just can’t. Changing a golfer’s handicap after the round and declaring the loser a winner? Not quite.
Ahh…I think I have it. You go out to a restaurant for a meal. You order the meal, eat the meal, pay for the meal, and go home. Two weeks later you get a bill from the restaurant saying that they had raised prices on their entrees and you owed them another $20 for that meal from two weeks ago.
That’s still not quite right. Let’s try another.
Robin Hood robs from the townsfolk and gives to the nobility, to help them out of a bind they got themselves into through bad decisions (shouldn’t have sunk all that money into new expensive villages where the villagers couldn’t afford to stay there). The nobility then pay some townsfolk some extra money for being loyal workers. Robin Hood gets pissed, gets a list of those so paid, and steals the money away from them again, even though he had originally required the nobility to give those townsfolk that extra money.
Man, Robin Hood is a jerk.
Well, that’s about the best I can do. Maybe someone else out there can come up with a better analogy.
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Here’s my go:
A guy buys a house that is crumbling down, but he wants to save it. So he goes out and tries to find some people to fix the house. Trouble is, no one really wants to fix it. The house is falling apart and it would be cheaper to let it fall down and build up whatever is left standing. But the guy is adamant and wants to prop up the house, so he hires you to fix it. You’ll get paid, of course, and given a blank check – spend as much as you want. Also, if you do a good job, you’ll get a ham sandwich – it’s part of the contract. After six months and billions of dollars, the guy turns around and wants to know what you did with the ham sandwich. He’s mad that he gave you a ham sandwich. He’s going to charge you for that damn sandwich.
Here’s my go:
It’s like a direct violation of Article I, Section 9 of the United States Constitution:
No bill of attainder or ex post facto Law shall be passed.,
Was it legal when they did it? Yes? Then penalizing them for having done it, whether via a retroactive criminal law (outright unconstitutional) or a retroactive tax penalty (which may have more flexibility in practice, though it shouldn’t in theory), is a violation of one of the first principles of the rule of law: that the law should be KNOWABLE.