Tuesday, March 17, 2009

Santelli on The AIG Bonuses (Plus my Thoughts)

First, Santelli:

Video embedded below.

My thoughts:

I tend to agree with Santelli, people outraged about this relatively pitiful amount should be flipping out regarding the bailout packages. There is something that seems inherently wrong in paying a bonus to people who drove the company into the ground. Still, there is this little thing we having in America known as a contract and the rule of law. My understanding is that these bonuses were contractual obligations and there for had to be paid.

Come to think of it, there is a way to get out of paying bonuses embedded in contracts. It is bankruptcy. Hmmm, let the companies fail and they will not pay the people that destroyed it bonuses. Even if people were really intent on not letting a company fail, attach some strings to the bailout.

Perhaps even 'scaryer' then the apparent incompetence on display is the response. Listen to Chuck Schumer (D-NY).

Video embedded below.

Give back the bonuses or we will take them! The idea of a specialized tax aimed at the recipients of the bonuses smacks of a Bill of Attainder. A Bill of Attainder is criminalizing conduct after a person has committed an act to punish them. The idea is to circumvent a trial or punish people who had not done anything legally wrong. My (granted limited) understanding of Bills of Attainder which are expressly outlawed by the Constitution refer to criminal acts. As such, a specialized tax may not technically run afoul of the Constitution.

The idea of specialized/individualized/personalized taxes, especially if they are technically legal, should send a chill down your spine. Imagine what politicians would/could do with that power. How long before Rush is hit with a special tax? Would you speak out against the government if it meant that you, your family, and your friends would be on the receiving end of a specialized 95% tax?

This is a frighting, dangerous idea that must not be indulged.

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