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Kangaroo Court . . . MUST READ!!

Posted by Larry Doyle on March 19, 2009 4:20 PM |

The kangaroo court on Capitol Hill just passed a bill to tax bonus payments at a 90% rate for employees (with family incomes in excess of $250,000) of AIG and other firms that received $5 billion or more in government bailouts.  In my opinion, kangaroo-courtthis piece of legislation is a poorly constructed means of recapturing government funds.

I have previously stated that firms which were truly bailed out by the government should be subject to strict government compensation controls. A number of firms – such as Northern Trust, JP Morgan, Wells Fargo, and Goldman Sachs – were compelled to take government funds. If employees of these firms are subject to this tax, it will be a travesty and injustice of unprecedented proportions. I believe that Congress is unknowingly escalating class warfare amidst a facade and charade of protecting the public. I believe we will see public outrage from employees at these firms (JP Morgan, Northern Trust, Goldman, Wells Fargo) that can only be rivaled by our forefathers back in the 1770s. This tax is another means of promoting the income redistribution upon which Obama ran his campaign. Taxation without representation is tyranny!!! 

Amidst the smoke and mirrors emanating from Washington, make no mistake this legislation passed today is an attempt to cover the incompetence and ineptitude of these legislators.  This smokescreen is further displayed as Nancy Pelosi Blames Bernanke Over AIG Bonus Fiasco.     

In my opinion, public outrage would be mollified to a much larger extent by payments from our politicians in addition to the AIG employees and others. I am referring to the grotesque sums paid by Wall Street firms (banks, insurance companies, hedge funds, accounting firms) in the form of campaign contributions and lobbyist dollars to curry favor with Washington. 

I called on the return of these payments from politicians on March 9th in How Wall Street Bought Washington. Well, the WSJ has picked up on this theme and is making the same point in highlighting Critics Got Donations from Insurer.  If the government plans to take employee bonuses, let’s have the political crowd exposed for their greed and incompetence as well. At that point, perhaps we may really start to make some progress.    

Yesterday, as President Obama informed the press that the buck stops at his desk, a reporter asked him whether he would return the $104k his campaign received from AIG in 2008.

He ducked the question. 

Change? Sounds like more of the same to me!!  

LD

  • lizzy

    Nancy was dancing pretty fast: Bernacke, Bush, Dodd. Unfortunately no credibility; I wouldn’t buy a used car from her. I am beginning to wonder if all the outrage from the pols is a red herring. What are they really doing besides trying to destroy the economy?

  • Larry Doyle

    I believe th eperformance in Washington is a function of 1. a lack of understanding of basic economic principles 2. greater concern with pushing a very liberal agenda 3. placating a variety of lobbysits 4. collecting money to get reelected.

    I see ample evidence of each of these points and not all that much evidence of selfless leadership.

  • TeakWoodKite

    Bills of attainder are forbidden by Article I, section 9, clause 3 of the United States Constitution

    So, just as I was posting this, a branch manager from our local American General, who we have a 2nd line with, knocks unannounced, with a print screen of our info. For some odd reason this person wanted our house phone number, and inferred we were a month late. Which is complete BS, since we ran our credit to in the process of seeing if we could make to the lee shore of Gilligan’s Financial Island. Our numbers in normal times would have people knocking down trees for the mailers to us.

    Who owns American General Finance? AIG.
    The first time in 13 years of blissful homeownership a person from a loan company has knocked, and braying like a mule…very very strange. What it tells me is that AIG/ American General Finance is in deep dung.

    No kidding BO ducked the question. Somebody ain’t
    fessing up they lost the anchor, and there is a storm a coming
    It wasn’t like this person was looking to drum up business or anything, and her manner was very “police” like.
    Remarkable.
    “I must be shutting up like a telescope”, said Alice. The Mad Hatter was indifferent to it all.

    • Larry Doyle

      TeakWoodKite….first off, thanks for sharing the clip on the mule. Very funny!! Also that is an enlightening piece of info on AG/AIG. No doubt they are scratching for money anywhere they can find it.

  • fiscalliberal

    I wonder if history will say: Collapse of Lehman was good because we are able to see the house of cards. The TARP is good, because the government is learning how much work it is to bail out thier errant friends.

    I wonder why it is that Obama and Geitner cannot get people to work in the Treasury. Right now Geitner is swamped. Barack is in over his head and cannot help him. The Republicans are going to capitalize on the AIG blunder and turn it into a competency issue

    • Larry Doyle

      Fiscal….in my opinion, the biggest factor impacting a market and our economy is CONFIDENCE. I do not see a lot of reasons to increase confidence levels based on actions in Washington.

      Sad but true.

  • getfitnow

    LD, do you think a legal challenge will be raised?

    • Larry Doyle

      Getfitnow…without a doubt. I do believe a constitutional challenge will be made at this tax. From what I understand a bill of “attainder” which targets one specific group can not be enacted.

      For our Federal legislative bodies not to appreciate, understand, and manage affairs accordingly is as bad as I have ever seen.

      As I think this situation through, I really wonder whether this was not a totally calculated move on the administration’s and Democrats part. Could they be that calculating?

  • Donnie

    LD,Could you explain to me that if we (taxpayers) own 80% of “Ain’t It Great” why haven’t we replaced these people who recieved bonuses and are to blame for the failure of this company,starting with the CEO.There is alot of good people looking for work.

  • Larry Doyle

    Donnie,

    Great question. I will say that given that the government took over AIG last September, turning around an organization of this size is not unlike trying to turn around the Titanic on Rte 112. It may be possible but it takes a while.

    Additionally, part of the smoke and mirrors is the spin that these transactions are so complex. That I do not buy. There are plenty of people on and off Wall Street who fully understand and appreciate the risks embedded in AIG’s books.

  • thinkaboutthis

    You know, I keep wondering why people are not focusing on who, what, where, when and why is Obama floating around the country during major problems.

    WHO: Who chooses exactly the reason Obama must get out of town at specific times. He left while Congress was getting ready to pass the Stimulus, he leaves while Congress is posing a 90% tax on a targeted group of people — who is telling him to get out of town —

    WHAT: What is Obama setting up with these state politicians to assure that the Democrats do not loose seats in 2012? What if, this is really all about the 2012 elections — all these visits. Buying off the powers to be — before it all begins…

    WHERE: Where is the President’s loyalties to the office of POTUS to continually be absent from Washington and have the audacity to say in another state how great it is to leave there and get away from the bickering. Where is the leadership??

    WHEN: When are the people of the USA going to realize that in the art of war — diversion is one of the best weapons one can use. All this is is diversion and and sensory bombardment while behind closed doors our country is being manipulated in a major fashion.

    WHY: Why do people feel so powerless, when individual power supersedes.

  • Larry Doyle

    You got it!! Lot of smoke and mirrors. Well said and very thorough!!

    Thanks.

  • Pingback: BofA’s Lewis calls bonus tax "unfair": memo (Reuters) — But As For Me()






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