Wednesday, March 18, 2009


One of the proposals for clawing back the bonuses paid out to the morons who ran our economy into the ground (by insuring products they didn't have the money to back up) is Rep. Carolyn Maloney's proposal. Maloney (D-NY) suggests that we tax AIG bonuses at 100%. I support this initiative.

Still, there are those who counter that this can't be done because the Constitution says we can't attach a "Bill of Attainder" (Art. I, Sec. 9 and Art. I, Sec. 10).

In simple terms a Bill of Attainder says we can't single out individuals or small groups of people for punishment after the fact. The goal of the Framers was to prevent "trial by legislature" or, put more simply, to prevent our country from being taken over by a legislative lynch mob or a Kangaroo Court mentality. Fair enough.

What these people fail to mention, however, is that there's nothing in the Constitution that says naked greed and stupidity that undermines our nation's economic health are protected.

Think about. What AIG and their financial partners have done undermines the "general Welfare of the United States" which means that Congress has "the Power to lay and collect Taxes, Duties, Imposts and Excises" provided that they are "uniform throughout the United States" (Art. I, Sec. 8). What this means is that if Congress does not single out AIG and, instead, makes clawback provisions uniform for all financial institutions who were saved by the taxpayer bailout we can get our money back. The legislation could say something like this:

"Given the current financial situation that our nation confronts, and how it undermines the economic stability and general welfare of the United States, any financial institution that received, or receives, TARP, TALF, Government, or any Federal Reserve funds from ________ through _________ will have their wages, retention salaries, or bonuses exceeding ______________ taxed at ________%."
The language could be more specific, but you get the point.

And the best part? We can get back a good chunk of the more than $4 billion in bonuses paid out to the Merrill Lynch incompetents, and can start pursuing other excessive bonuses and wages paid out to the other financial incompetents who helped run our economy into the ground. At the end of the day Congress just needs to get creative, and grow a pair.

I'll have more to say on this, and other options, later.

- Mark

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