Bill of Attainder

BY: MICHAEL P. RICCARDS

The behavior of AIG has mobilized the country in general against the bailouts and against the excesses of capitalism. In the fourth quarter of 2008, that company lost more money than any corporation in US history. And that hemorrhaging has led to government acquisition of 80% of the AI complex. It seems no longer is greed good, as the taxpayers have to pick up the tab for such neglect. As wags have put it, in the USA we have socialism for the rich, capitalism for the poor. The wealthy want the rewards of the system without the risks.

To add to the populist anger is the announcement of multi-million dollar bonuses. Not since the Katrina catastrophe has public attention so focused on one issue. Obama Administration spokesmen cannot quite figure out when they learned of the AIG bonuses. Congressional leaders, such as Senator Christopher Dodd and Representative Barney Frank have run away from any responsibility for the language of the bailout they so strongly supported. To cover up their roles in that bonus goof, Congress people have introduced legislation to tax heavily the bonuses, in a sense to roll them back. If we cannot get them to refund the bonuses, the government will tax them and some state Attorney Generals are threatening to make public the names of bonus recipients as a form of intimidation. They would repeal in a sense those bonuses after the fact.

AIG has become the epitome of all that is wrong on Wall Street, and they are taking a beating in the court of public opinion. When the New York Times printed a self serving op ed piece by an AIG vice president who had resigned in protest of the recent criticisms, the newspaper found that public letters and emails were 10 to 1 negative against him. Such criticism of AIG is well deserved. That is fine, that is politics. If one takes public money, one loses flexibility and independence. But the legal threats to go after the bonus recipients are very troubling developments, and we should think twice about how we are moving to that level. Surely we should have inserted language in any bailout to protect the taxpayer from such an offensive salary enhancement at a time of high unemployment and government deficits.

However, we have already seen how the Bush Administration has violated the most precious of our constitutional rights—the writ of habeas corpus. The approach of singling out by legislation one person or a discernible small group is a violation of another constitutional right – the prohibition of bills of attainder. The American Founding Fathers hated the British monarchy’s use of bills or writs of attainder. It is a highly arbitrary action by powerful governments that avoid due process—another constitutional guarantee. It is very dangerous to use the awesome powers of the government to single out people for penalties.

To pass a bill (essentially a bill of attainder) interfering in the Terri Schiavo case in Florida was wrong, and done to garner fundamentalist support and advocated by conservative Republicans and an opportunistic President Bush. It was morally wrong and politically corrupt. To use the legislative process to take away from AIG executives bonuses is unconstitutional. It is fine to be angry with the abuses of Wall Street and the excesses of capitalist speculation. We may hate taxpayer bailouts of AIG, but if we follow the liberal Democrats in Congress we will surely lose our historic liberties. In the end, we will regret our intellectual laziness in allowing our righteous anger to overcome our prudence as a free people.

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