House passes bill taxing AIG, other bonuses

[The Minsky Moment]

In Poland, for example, it is interpreted from article 1 of the constitution which states that "the Republic of Poland is a democratic state operating under the rule of law.", so as you can see there is a room for interpretation there.

The US constitution doesn't need to say that, because we invented the idea of a democratic state under the rule of law.

[The Minsky Moment]

I will confess that I have always found the reasoningbehind Calder v. Bull suspect. 

you wouldn't be the first, but the Supreme Court is unlikely to overturn a 200+ year old precedent that has never been seriously questioned.

[Martinus]

In Poland, for example, it is interpreted from article 1 of the constitution which states that "the Republic of Poland is a democratic state operating under the rule of law.", so as you can see there is a room for interpretation there.

The US constitution doesn't need to say that, because we invented the idea of a democratic state under the rule of law.

I think the British did it before you.

[KRonn]

I'm so disgusted with Congress and their grandstanding on the bail out issue. What a bunch of bastards, and they may be unwittingly feeding the crazed mob that's starting to stake out AIG employees of any type, regardless if involved with bailouts. This crap has gone too far. Congress's irresponsibility in the lead up to all of this, from financial failures to the problematic bail outs, changing stories on who knew what about bail outs... all of it, now add the mob mentality. All to deflect attention from Congress's errors.

These damn bail outs are annoying but small stuff compared to what's really going on with the economy and efforts to fix things.

Hmm... maybe Congress fears getting run out of town on a rail, so it looks to me like they're getting out in front of the crowd and calling it a parade.   

[Neil]

In Poland, for example, it is interpreted from article 1 of the constitution which states that "the Republic of Poland is a democratic state operating under the rule of law.", so as you can see there is a room for interpretation there.

The US constitution doesn't need to say that, because we invented the idea of a democratic state under the rule of law.

I rather doubt it (as American Rebellion thinking owed much to Enlightenment philosophes), but you could certainly make a case that the United States was the first to put it into practice.

[Sheilbh]

Take a look at this http://www.gallup.com/poll/116941/Outraged-Americans-AIG-Bonus-Money-Recovered.aspx Gallup poll from the 17th to understand why even Republicans (who nominally say that the government should be limited) want this irresponsible legislation to pass.  Even 2/3 of Republican voters say that the bonuses should be blocked or recovered.

Bumper-sticker thinking has always led to bd law. 

I agree.  I think this is to the Democrats what earmarks are to the Republicans.  In both cases it's a distraction, they represent tiny sums of money compared to everything else to do with AIG and that earlier big bill.  But because the entire thing is hugely difficult to explain and understand it's easier to just get OUTRAGED about this.  And I hate the political trend for ever more OUTRAGE about things.

I read a brilliant analogy.  The day after I read the AIG bonus story the Fed basically threw in the kitchen sink with its quantitative easing strategy.  It basically released trillians of dollars and this was barely noticed so far as I can tell.  But if you imagine the AIG figure is $1000 and think how important that is, then by comparison what the Fed did was worth $7 000 000 and it didn't make a ripple.

It's pathetic.


Although I have to say this crisis has made me think the BBC's worth every penny, their explanations on shows like Newsnight have been very good.  Because they're looking at the US from without they're not as interested in the political stuff so they tend to talk more about the policy's merits than I seem to think American news outlets do.

[DontSayBanana]

I agree.  I think this is to the Democrats what earmarks are to the Republicans.  In both cases it's a distraction, they represent tiny sums of money compared to everything else to do with AIG and that earlier big bill.  But because the entire thing is hugely difficult to explain and understand it's easier to just get OUTRAGED about this.  And I hate the political trend for ever more OUTRAGE about things.

I read a brilliant analogy.  The day after I read the AIG bonus story the Fed basically threw in the kitchen sink with its quantitative easing strategy.  It basically released trillians of dollars and this was barely noticed so far as I can tell.  But if you imagine the AIG figure is $1000 and think how important that is, then by comparison what the Fed did was worth $7 000 000 and it didn't make a ripple.

It's pathetic.


Although I have to say this crisis has made me think the BBC's worth every penny, their explanations on shows like Newsnight have been very good.  Because they're looking at the US from without they're not as interested in the political stuff so they tend to talk more about the policy's merits than I seem to think American news outlets do.

Yeah. The only thing meaningful I've taken from this whole thing is that Barney Frank has finally been proven to be an idiot, thinking that his vague "ownership rights" supercede the explicit legal written contracts that led to this. No other ownership in the country has the right to penalize its employees so heavily for managements' fault in missing important contractual problems.

[Neil]

The bill will pass, and this will all get worked out in litigation.  In five years or so, we'll find out if Congress has the ability to punish class enemies with taxation.  If so, it's going to get ugly in politics.

[DontSayBanana]

Interestingly enough, I saw a tiny, tiny blurb on CNN's ticker "White House will not endorse tax on AIG bonuses." I'm surprised it hasn't made more ripples; sounds like somebody has set a press embargo.

[Admiral Yi]

Interestingly enough, I saw a tiny, tiny blurb on CNN's ticker "White House will not endorse tax on AIG bonuses." I'm surprised it hasn't made more ripples; sounds like somebody has set a press embargo.

Endorsing or not endorsing is a purely political act.  What matters is whether he signs it or vetoes it.

[DontSayBanana]

Interestingly enough, I saw a tiny, tiny blurb on CNN's ticker "White House will not endorse tax on AIG bonuses." I'm surprised it hasn't made more ripples; sounds like somebody has set a press embargo.

Endorsing or not endorsing is a purely political act.  What matters is whether he signs it or vetoes it.

Unfortunately, I wouldn't know where to start looking for legal foundations for excise taxes, but as I was looking over Title 26 (§ 5891. Structured settlement factoring transactions), which looks to most closely resemble the tax they're proposing, I note that it's only a 40 percent tax. It had been mentioned that the tax code is supposed to be amended for legislative purposes, and not for punitive ones, but does anyone know if that's codified, or if it's just political talking points?

[DGuller]

Hopefully this bill gets delayed long enough that the furor would subside, and it will die a much-deserved death.  As much as I am sickened by the riches lavished on those who broke the financial system, what Congress tried to do was just a badly thought out lunacy.

[KRonn]

Hopefully this bill gets delayed long enough that the furor would subside, and it will die a much-deserved death.  As much as I am sickened by the riches lavished on those who broke the financial system, what Congress tried to do was just a badly thought out lunacy.

Very much agreed. Made Congress look like a bunch of third world thugs. What a seedy and sinister way to do the nation's business.

Instead of, or in addition to, grilling CEO Liddy, they should have been grilling some of their own members and Treasury officials of both the Bush and Obama admins about this. Or better yet, about how the bail outs have been handled over all. But even so, as much as the bonuses anger us, going after them in hearings is more like a deflection from the mistakes and more serious issues around it.

And now I want our Congress members to speak out against the mob mentality and witch hunts targeting AIG workers and families. Might go some to redeem Congress's image, at least over this dog and pony mob farce.

[DontSayBanana]

Very much agreed. Made Congress look like a bunch of third world thugs. What a seedy and sinister way to do the nation's business.

Instead of, or in addition to, grilling CEO Liddy, they should have been grilling some of their own members and Treasury officials of both the Bush and Obama admins about this. Or better yet, about how the bail outs have been handled over all. But even so, as much as the bonuses anger us, going after them in hearings is more like a deflection from the mistakes and more serious issues around it.

And now I want our Congress members to speak out against the mob mentality and witch hunts targeting AIG workers and families. Might go some to redeem Congress's image, at least over this dog and pony mob farce.

Yeah. I'm pretty repulsed about how Chris Dodd got away with covering a bald-faced lie to the press with an even flimsier one ("my comments were miscontrued"), and nobody made a peep about the possible conflict of interests inherent in him having been the one to draft the language.

[KRonn]

Very much agreed. Made Congress look like a bunch of third world thugs. What a seedy and sinister way to do the nation's business.

Instead of, or in addition to, grilling CEO Liddy, they should have been grilling some of their own members and Treasury officials of both the Bush and Obama admins about this. Or better yet, about how the bail outs have been handled over all. But even so, as much as the bonuses anger us, going after them in hearings is more like a deflection from the mistakes and more serious issues around it.

And now I want our Congress members to speak out against the mob mentality and witch hunts targeting AIG workers and families. Might go some to redeem Congress's image, at least over this dog and pony mob farce.

Yeah. I'm pretty repulsed about how Chris Dodd got away with covering a bald-faced lie to the press with an even flimsier one ("my comments were miscontrued"), and nobody made a peep about the possible conflict of interests inherent in him having been the one to draft the language.

Apparently Dodd's wife works for one of the AIG firms; not necessarily a big deal I guess. But it would be hilariously bad if she was supposed to get a bonus!   

http://realclearpolitics.blogs.time.com/2009/03/23/senator-dodds-wife-and-aig/