Seeking Alpha
Hedge fund manager, long/short equity, value
Profile| Send Message|
( followers)  

This is great. Our irresponsible Congress has declared war on innocent workers trying to fix the mess created by others and in part, by Congress itself.
Dear AIG, I Quit!!

Here is a good post on the current "Financial McCarthysim" currently being exhibited. Another one by Fred Wilson is here.

Another interesting point is the recent legislation to tax AIG bonuses above $250k at 90%. This is a retroactive tax legislation akin to Congress deciding driving a SUV is illegal and fining everyone who currently owns one. No different.

The height of the lunacy was the admission from Congress that members voted for it even though they assumed and realized it "would not pass a Court challenge". In other words, they succumbed to the angry mob they themselves incited. Let's not forget, these bonuses were not a secret and Treasury Secretary Tim Geithner knew about them months ago, as did many members of Congress.

In an effort to extort those who received the bonuses to give them back, the NY AG Cuomo demanded the names of those who received one. The implied threat here was the names would be made available to a then frenzied public. One must not forget these folks were already being subjected to death threats, had armed security at the building and patrolling parking areas. This was no idle concern on their part.

Let's look back shall we? Remember a little event called 9/11? What would have happened if the President and Congress attacked "Arabs" the way they currently are attacking "Wall St." and "Bankers". If we decided to pass retroactive legislation stripping Arab mosques of their tax free status as houses of worship and refund monies would that have been accepted or cheered by the public? Would the ACLU have remained silent?

We are a nation of rights and laws. The willing suspension of those for any group, no matter how distasteful it may be cannot be tolerated. Why? Someday you may be in the group targeted.

In the Federalist Papers #35, Alexander Hamilton wrote:

There is no part of the administration of government that requires extensive information and a thorough knowledge of the principles of political economy, so much as the business of taxation. The man who understands those principles best will be least likely to resort to oppressive expedients, or sacrifice any particular class of citizens to the procurement of revenue. It might be demonstrated that the most productive system of finance will always be the least burdensome.

Yet, this is exactly what this Congress did... it is shameful.

Congress, in its infinitesimal childlikeness, held hearings to publicly eviscerate those NOT RESPONSIBLE for the problems at AIG. Now, they are leaving. Who will replace them? Who will try to assure the U.S. taxpayers get repaid? Would anyone in their right mind go work there now?

This was a pyrrhic victory for Congress. The theologian, Reinhold Niebuhr writing of the need for coercion in the cause of justice warned that: "Moral reason must learn how to make a coercion its ally without running the risk of a Pyrrhic victory in which the ally exploits and negates the triumph"

Guess Congress did not get the memo...

Disclosure: No position

Source: Congress' Handling of AIG Bonuses Is Shameful