I was listening to Peter Schiff’s Wall Street Unspun for this week and he said something that cemented a change of perspective I had been considering regarding the AIG bonuses. I had been thinking about this idea of taxing the bonuses at 100% and relizing that it amounted to an ex post facto law – which is specifically forbidden in the Constitution. What Peter said was that Congress was wrong to bail AIG out in the first place and that if they hadn’t AIG would not be able to pay these bonuses now. Secondly, he said that if they had wanted to stop the bonuses they should have done so up front by making it a condition of receiving their bailout money. (He also accurately pointed out that the excuse that these bonuses should not be necessary to reatain AIG employees in this economy – few people would leave their jobs in a climate of rapidly rising unemployment and smart companies should be avoiding the employees from the division that crippled a company the size of AIG.)
Between the Constitution and the logic of Peter Schiff I realized that as much as I dislike the fact that these bonuses are being paid I cannot support Congressional action to tax them back after the bonuses have been paid and after the bailouts have been given. Simply stated, Congress is acting immorally anytime they try to change the rules after making their promises – it’s solid proof that they should not have made those promises in the first place.
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