Come for the Politics, Stay for the Pathologies

Friday, March 27, 2009

Extortion Along the Potomac

An op-ed piece in today's Wall Street Journal cites another interesting request from Senator Charles Grassley (R Iowa; yes the same one that previously requested the AIG bonus recipients commit hari-kari):

On November 19, Chuck Grassley, the ranking Republican on the Senate Finance Committee, urged all 50 state Attorney Generals to "consider the appropriateness of inquiring whether financial institutions located within your State have violated (or would violate) State law by making certain executive compensation payments to executives and top management." He cited approvingly Mr. Cuomo's probe into AIG perks and bonuses.

This might help explain why the Republicans lost the last election.

It also goes a long way in explaining the extortionist tactics of politicians from both parties. Unlike real mobsters, they don’t take the payoff home in cold hard cash. Their take-away is actually dirtier. What they get in exchange for self-righteous outrage is a temporary bump in the popularity polls. Or at least that’s what their pollsters – along with their in-bred populist reaction - tell them the people want: outrage and public flogging.

How refreshing, then, to find a lone-wolf, J.B. Van Hollen, Attorney General from Wisconsin, (of all places!) who not only went to law school, but actually learned something while attending. He summarizes in the last paragraph of his response to Senator Grassley:

"However, I will not be initiating investigations through press releases, nor will I treat all corporate executive expenditures as presumptively wrongful. Wisconsin law certainly does not. Financial institutions (and other businesses) on the verge of insolvency are ill-advised to make unnecessary expenditures, whether to executives or otherwise. At the same time, contractual obligations are generally to be fulfilled, work should earn compensation, and there is no law in Wisconsin making a contract illegal simply because someone is well compensated. Absent specific information indicating a transaction is fraudulent as opposed to foolish, I will not use my office to threaten litigation in an attempt to micromanage Wisconsin's businesses. Corporate governance is generally a matter for shareholders, not public officeholders."

It makes me rather wistful for the good old days when public service was really about - well - public service, not just a term-long self-aggrandizing campaign commercial.