Sense on Cents

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, this 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

This entry was posted on Thursday, March 19th, 2009 at 4:20 PM and is filed under American Consumers, Barack Obama, Ben Bernanke, Congress, Economy, Hedge Funds, Insurance Industry, Nancy Pelosi, Obama Administration, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.