Attempts at theft

Yesterday, Congress held hearings on the subject of retention bonuses paid to certain AIG employees, and the results were totally distasteful. Besides pressuring the chief executive to "ask" employees to return the money, Congress is considering a bill to tax those bonuses at 90%. Such legislation would not be considered to be an ex post facto law, based on a lousy 1994 Supreme Court decision. However, I wonder if such legislation could be considered a bill of attainder, since it would attempt to directly penalize a specific set of individuals.

The fact is, back in early 2008, when the markets were weakening but before AIG really tanked, these individuals agreed to stay with AIG in return for retention bonuses. They could have easily gone somewhere else, but stayed for financial incentives. And now Congress and the President want to take those away from them. Worse, Sen. Grassley said that the honorable thing to do for these individuals would be to resign or commit suicide. Why isn't the public outraged that a senior senator is saying that these people kill themselves?

How would you like it if you have been working somewhere for $70K for the last year, only to have your employer come back and say, "sorry, we're going to take everything back past minimum wage"? Yes, the AIG employees are making more than minimum wage, but they are making what was promised to them.

If the United States is going to start penalizing individuals with taxes, I think it should start by taxing at a rate of 90% all individuals in the executive branch who make $400,000 per year, and all individuals in the legislative branch who make $174,000 per year.

Who cares about contract law?

President Obama has declared war on the insurer AIG, which the US taxpayers bailed out in the fall of 2008. His ire is directed at the retention bonuses that AIG is paying some of its employees, and he said that his Administration would "pursue every legal avenue to block these bonuses." Of course, he seems to be overlooking the fact that AIG is contractually required to pay these retention bonuses. Because the US Government decided to bail out AIG rather than force it into bankruptcy court, there is no legal basis for canceling existing contracts.

The issue of the retention bonus payments is an excellent example of why AIG should have been forced into bankruptcy, rather than having US taxpayers throw $170 billion dollars at it. And rather than merely state that the United States operates under the rule of law, President Obama is posturing that he intends to undermine it, if not actually undermining it.

What does Obama have against the poor?

Yesterday, Treasury Secretary Geithner was testifying in front of the Senate Finance Committee about President Obama's proposed budget. Among the controversies that he had to address was the proposal to limit deductions to charity for those with higher incomes. Geithner stated that the this proposal, along with the proposal to limit home interest deductions, were necessary in order to proceed with health-care "reform".

In these difficult economic times, why would anyone want to make it more costly to help the poor? Given the fact that President Obama just signed a $786 billion dollar stimulus package that was mostly pork, it's not likely that the President suddenly became a fiscal conservative. A relatively obvious answer lurks in the shadows. If donations to charity fall, people become more dependent on the government to provide food, shelter, and other basic necessities. This allows the government to control how people are helped, and also adds jobs - er, paper-pushers - to the Federal bureaucracy.

Personally, I'll stick with charities any day, as they are more efficient than Washington any day.