The move to tax the bonuses paid to AIG managers at 90% is so arbitrary and capricious that it should be struck down by the courts. While the outrage is understood, the idea that Congress can direct such a punitive tax at the targets of a single company is absurd and should be worrisome to any citizen.
Who could they target next; the executives of fast food companies or alcohol companies? How about the executives of oil companies, or health insurance companies, or firearms manufacturers?
What about the executive of Fannie Mae who got a 90 million dollar bonus as they drove that federally protected behemoth into the ground; Where is the outrage there?
It would have not been unusual to have made the bailout contingent on subordinating loans and getting management to renounce existing bonus structures. The was forced on Long Term Capital when the Fed engineered a bailout of the disastrous hedge fund. Not to do so implied incompetence on the part of Geitner or Dodd or the administration, or possible corruption on the part of the two largest recipients of AIG campaign largesse.
Dodd has still not answered lingering questions about his favored status loans with Countrywide while they were subject to Congressional scrutiny.
It is more than ironic that New York is lamenting the loss of tax revenues on the sharply reduced bonuses on Wall Street. Are we to bail out state and municipal governments that suffer from the loss of tax revenues as a result of punitive confiscatory taxes from the federal government?
Does this ever end?