Mob Rule East of the Potomac
Investor’s Business Daily (IBD) introduces their lead editorial today about the AIG bonuses (background: Washington Post, Wall Street Journal, IBD 3/19, and IBD 3/20) saying:
“Of all the alarming things going on in Washington these days nothing is as shocking, or disheartening, as the collapse in respect for the rule of law and the Constitution. Just look at the flap over AIG's bonuses.”
IBD then explains:
“Like most Americans, we found ourselves angry and perplexed that a company that took $173 billion in bailout aid because it had failed to run its affairs competently would hand out $165 million in "bonuses" to its top employees.
“Yet, as with many things, the tale is a bit more complex than the sound bite. For one, Congress authorized the bonuses to be paid — at the direct instigation of Sen. Chris Dodd, D-Conn., who took $103,100 from AIG during the 2008 political cycle.
“And while letting AIG pay some employees retention bonuses might seem wrong or even immoral to some, it wasn't illegal.
“Yet Congress, which created the problem in the first place, acted with consummate cowardice by trying to "claw back" the money through a punitive, 90% retroactive tax, one specially levied on those who work at AIG. It wants to do the same thing with recipients of TARP money, too.
“Why the big change? Public anger. Welcome to mob rule.”
After more explanation, IBD concludes with:
“This bill is bad and unconstitutional. It was passed — let's face it — because Congress fears the people's wrath. The bill doesn't stand up to legal scrutiny. But then, neither does this Congress.” (emphasis added)
The editorial is worth reading in its entirety.