Come for the Politics, Stay for the Pathologies

Tuesday, March 17, 2009

More AIG Angst

Yes, everyone everywhere is a twitter (literally in some cases) over this latest outpouring of greed. The more pertinent issue might be bad business judgment, but that’s another post.

The US government bought this pig in a poke over a weekend without doing any due diligence. The contracts were in place then, and enforceable now. The time to negotiate is now over. Even the NYT thinks so.

And to the good Senator from Connecticut who thinks we should draft legislation to tax the bonuses at 98% to get the money back in the government coffers: there is this pesky aspect to the US Constitution (you do remember the constitution don’t you, Senator Dodd?):

Article I, Section 9, paragraph 3: “No Bill of Attainder or ex post facto Law will be passed.”

“Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. ... The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community.” James Madison, Federalist Number 44, 1788.

For the time being we are still a nation of law. Sheeze, what do they teach in Civics class these days?