More words have probably been written about the situation with AIG in the past 96 hours then can possibly be read. So I am not going to dwell too much on the issues that got us to this point. However, I think that what is happening (even as I write this) in Washington, in our name, needs to be brought to the surface.
Like most people, I find it extremely difficult to swallow that the executives at AIG that caused the problems with the company got the types of bonuses that they did. Most of us will never see that kind of money, even if we become super-successful in our lines of work. However, after hearing Ed Liddy yesterday talk about his rationale, I can understand the decision. Leaders, no matter what size organization they run, are often given the choice of the lesser of two evils. I have no reason to doubt his explanation as to why he didn’t do more to abrogate the compensation contracts of the executives in that particular division.
The larger issue here is how our government is responding to the AIG mess. I, for one, have been quite embarrassed by the behavior of our politicians, especially in Congress. It goes through both sides of the aisle – from quips about the “Japanese” way to shrugging off death threats, our so-called leaders are acting out of emotion. Quite frankly, acting on emotion is what got us here is the first place.
Then there is the constitutionality of the whole matter. I am not a lawyer, and I did not attend law school. But I do know something about our Constitution. What is being lost here, in the rush to “do something”, is that the Congress is treading on very slippery ground. The framers of our Constitution specifically prohibited the Congress from passing what are called Bills (or Acts) of Attainder (see here and here. These usually seek to enact laws that punish or impose some other type of “pain” on a specific group or class of people. The Constitution also prohibits Congress from passing Ex Post Facto laws, or laws that are retroactive to a certain date or action (Article I, section 9, clause 3).
So, I ask the question…does not what our Congress is contemplating today not fit into this definition? Not only is law it is seeking to pass argeted at certain people, it is also being contemplated after the fact. The whole point of having this prohibition in the Constitution is to keep the government from using its ability to write laws as a weapon against the people. As stupid as the idea is of the folks at AIG taking these bonuses, Congress is “doubling down” on the stupid bet by contemplating passing laws to tax or other wise confiscate the bonuses from these executives (as well as others). All to cover their you-know-whats for specifically allowing it in the first place. I could go on and on about this topic, but I am sure you get the point.
At risk of sounding fatalistic, I would tell you to call and email your representatives…but it isn’t going to do any good. They are going to do what they want, Constitution be damned (just as an aside…when do you think was the last time any of them read it?). I am going to, but I also like jousting with windmills. You may even agree with what Congress is doing today. If you do, just ask yourself what happens when the “them” that Congress is going after becomes you? Once the door is opened, what is to stop government from using its power to putatively punish you? One of the points of the rule of law is to protect all of us from the fickle tides of emotion. When our government stops paying attention to the highest law of the land, the rule of law erodes. Once the rule of law begins eroding, all of us become subject to the ebbs and flows of emotion.
Part of the result of the American Revolution was the institutionalization of the rule of law; that no one person, no matter the office, is above it. When emotion replaces reason and the rule of law, you get not the American Revolution, but the French Revolution.
(Here is another great article about the bonuses by Johan Goldberg of the National Review.)