I can't believe that this fundamental issue has received so little coverage and/or outrage.
Alex Baldman- March 2009 on the AIG Bonuses:
The Unlawful Shakedown
Section 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility-United States Constitution Article 1 Section 10
In October, I wrote that I would vote no on the bailouts. Let these companies die a natural death. But our government decided differently. And we live with the daily damage.
Which brings me to the AIG bonus/retention payments issue. These American citizens entered into a valid contract with AIG. When the American government decided to bailout AIG, it decided to honor AIG's contractual obligations,which clearly include these bonus payments.
Government has no power to unilaterally alter, impair,or materially change the terms of a valid contracts freely entered into by American citizens.
Its in the constitution. (See above.) The founding fathers knew that if the government had the power to alter contracts it would lead to tyranny. Why would anyone enter into a contract with an American or an American company when the U.S. Government could wave a magic wand and make the contract disappear?
Nor can our government pass an ex post facto law to target a select few American citizens and make them pay 90% of their earnings in taxes like our Congress is doing with these Americans that work for AIG. It's clearly unconstitutional, see Article 10 above.
Say you sold your house or business. As part of the sale, you pay the federal capital gains tax,say 15%. When you enter into the sale, you know what the existing capital gains tax is,and you factor it into the price you want to receive for your house or business. You know what the existing capital gains tax is by researching the existing capital gains tax laws. Now suppose after the sale, you pay the 15%,and the government comes along and says, we increased the capital gains tax to 90%. The law is retroactive. You owe Uncle Sam under $300,.000.
Think the government can do that to you? Off course they can't. Then why do most people think they can do it to Americans that work for AIG?
My friends, the AIG shakedown of the bonus money by our government is shameful. It is an unlawful confiscation of property owned by American citizens. It also sets a dangerous precedent. Lydon Johnson called it "breaking the virginity"- once the government does something for the first time,it makes it easier to do again and again.
We live in a scary time,where the powers that be have no respect for the basic civil rights of American citizens. The President, the Congress and the Senate regard your property as something they can take away from you with no due process of law. And don't look for the ACLU to weigh in on this,which is why when people refer to the ACLU as the protector of civil rights, I shake my head in dismay.
Listen, I know AIG employees are not the most popular people in America. But the fact is our constitutional protections apply to all American citizens,regardless of popularity or the amount of money they make.