It's certainly a tempting idea to grab a torch and a pitchfork, storm AIG's offices and start tossing these mooks out of windows.
Republican Sen. Chuck Grassley even suggested that the top brass of AIG should, and I quote, "follow the Japanese model and come before the American people and take that deep bow and say I'm sorry, and then either do one of two things -- resign, or go commit suicide."
Talk about a major sign of how things have changed! If a Democrat had said that a year ago, he'd have been denounced as promoting "class warfare" at best and dismissed as a Naderite socialist kook at worst. Guess we're all Naderite socialist kooks now.
But here's the thing. It seems that some of the contracts under which these bonuses are paid were negotiated before anyone -- President Bush, Congress, or Senator and later President Obama -- had any idea AIG was in trouble, much less that they needed a bailout. These shocking bonuses, which appear to be payable regardless of how the company or the recipient performs, appear to be debts incurred pre-bailout that are now coming due.
Yes, you heard that right, this one I'm not blaming Bush for. Shocking to some of you, I know. Don't worry, there's plenty I do blame him and his henchmen for in this mess. But on this one issue, I think everyone got blindsided.
Saying in an employment contract, "you get a bonus, no matter what," is, no doubt, a bad deal. But if we demand as a cost of the bailout that the company spend attorney fees defending a contract claim that AIG's going to lose and end up paying anyway (with interest), doesn't that seem like a worse deal?
I know, I know, you don't care about "legal technicalities," but if these guys sue AIG over these contracts, at least some legal argument for not paying is going to need to get made, probably at great expense. All I'm saying is, unless the contracts these guys negotiated before the government got involved don't tie the bonuses to company performance, then they're as much a legal obligation of the company as the light bill.
Yes, it was foolish of AIG to negotiate a deal like that. It was one of an awful lot of foolish things done by AIG that got them, and then us, into this mess. But what we can do about it may not be so simple.
Some in Congress have proposed the idea of recouping the bonus money via a tax. Sen. Chris Dodd has suggested a tax rate on these bonuses alone of as much as 100 percent. In fact, it appears that a provision to tax bonuses at a high rate was in a version of the original TARP bill, but was removed, and no one seems to know how or why.
I do like the idea of taxing these bonuses out of existence, but I worry that this may be what the Constitution refers to as a "Bill of Attainder" (an act of legislature declaring a person or group of persons guilty of some crime and punishing them without benefit of a trial). And the Constitution says Bills of Attainder are a big no-no. We've had eight years of a president who treated the Constitution as a suggestion. I'd like to start treating it as the law of the land again.
I want us to get that money back. But I think it's important for us to do so under the rule of law, especially now that emotions are running so high.
I have no problem with canning the people who head up AIG, giving them 15 minutes to clean out their desks, and having security escort them out of the building with all their stuff in a cardboard box. But I don't know that we should just give Obama and/or Congress the supreme power to take something away because it offends us. That would go beyond socialism into despotism.
It's become fashionable in the wingnut community to sneer at supporters of Obama by implying they think he's "the Messiah." Well, I might have no problem with the actual Messiah having unlimited power, but I'm leery of handing it to any man, including Barack Obama.