Sure people are angry after hearing about the AIG bonuses. But, as
Charles Krauthammer points out, the solution from Congress is even worse.
And there is such a thing as law. The way to break a contract legally is Chapter 11. Short of that, a contract is a contract. The AIG bonuses were agreed to before the government takeover and are perfectly legal. Is the rule now that when public anger is kindled, Congress will summarily cancel contracts?
Even worse are the clever schemes being cooked up in Congress to retrieve the money by means of some retroactive confiscatory tax. The common law is pretty clear about the impermissibility of ex post facto legislation and bills of attainder. They also happen to be specifically prohibited by the Constitution. We're going to overturn that for $165 million?
Instead of spending a week searching for the most over-the-top rhetoric to attack AIG executives, perhaps our nation's leaders could turn their attention to the real problems bedeviling the economy.
Geithner has been particularly maladroit in handling this issue. But the reason he didn't give the bonuses much attention is because he's got far better things to do -- namely, work out a rescue plan for a dysfunctional credit system that is holding back any chance of recovery.
It is time for the president to state the obvious: This recession is not caused by excessive executive compensation in government-controlled companies. The economy has been sinking because of a lack of credit, stemming from a general lack of confidence, stemming from the lack of a plan to detoxify the major lending institutions, mainly the banks, which, to paraphrase Willie Sutton, is where the money used to be.
Obama has been strangely passive about this single greatest threat to the country. In his address to Congress and his budget, he's been far more interested in his grand program for reshaping the American social contract in health care, energy and education.
Obama delegates to Geithner plans for a bailout -- and Geithner (thus far) delivers nothing. Obama delegates to Nancy Pelosi and her congressional grandees the writing of all things fiscal -- and gets a $787 billion stimulus package that is a wish list of liberal social spending, followed by a $410 billion omnibus spending bill festooned with pork and political paybacks.
Krauthammer then turns to another goodie for the Democratic base slipped into the stimulus bill.
That bill, we now discover, contains, among other depth charges, a Teamster-supported provision inserted by Sen. Byron Dorgan that terminates a Bush-era demonstration project to allow some Mexican trucks onto American highways, as required under NAFTA.
If you thought the AIG hysteria was a display of populist cynicism directed at a relative triviality, consider this: There are more than 6.5 million trucks in the United States. The program Congress terminated allowed 97 Mexican trucks to roam among them. Ninety-seven! Shutting them out not only undermines NAFTA. It caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade coming out of 40 states.
The very last thing we need now is American protectionism. It is guaranteed to start a world trade war. A deeply wounded world economy needs two things to recover: (1) vigorous U.S. government action to loosen credit by detoxifying the zombie banks and insolvent insurers, and (2) avoidance of a trade war.
Free trade is the one area where the world indisputably turns to Washington for leadership. What does it see? Grandstanding, parochialism, petty payoffs to truckers and a rush to mindless populism. Over what? Over 97 Mexican trucks -- and bonus money that comes to what the Yankees are paying for CC Sabathia's left arm.
Yup, just what our economy needs and what the fragile Mexican government needs - a full-fledged trade war in order to cater to teamster truck drivers. As
Rich Lowry wrote yesterday,
Our third-largest trading partner, the Mexicans have retaliated by saying they will impose tariffs on 90 U.S. industrial and agricultural products, worth $2.4 billion in 2007. So the cost of this “victory” against Mexican trucking will be borne by farmers and manufacturers around the country. The tit for tat is unlikely to escalate into a full-blown trade war, but we send a dreadful signal by violating a trade agreement at a time when protectionist pressures are rising worldwide.
Pres. Barack Obama says he’ll find a way to address Mexico’s complaint consistent with safety concerns. Since those concerns are a proxy for flat-out opposition to Mexican trucking, it’s not clear how that’s possible.
Democrats profess to love our allies — unless they want to trade with us. Mexico joins South Korea and Colombia among friends we are stiffing on trade. Perhaps if they got together and started an illicit nuclear-weapons program, they would be treated with more solicitude.
The politicians want to deflect our attention from the real problems so that they can slip in goodies for their own supporters and score points by their demagogic rants against the villain du jour. Meanwhile the bonfire continues.
4 comments:
Well, Obama is certainly doing his part to forward the far left agenda, and if you were paying attention this should be no surprise. He is doing what he believes is right (or left).
There is little in the present set up in Washington that motivates congress to do what is best for American citizens. Members of congress will get more faster positive reinforcement from taking care of B of A, AIG and just any old lobbyist than doing anything that is in my interest. And that's who they take care of. I don't distrust them because I'm paranoid. I distrust them because the only way they can and have gotten what they want is by sticking it to me.
I've only been blogging for about a year and a half and the first breakthrough I made was when I realized that the campaign finance laws were just congress making it legal to bribe them and making it very difficult for challengers to their seats to get any money. Here is something I wrote on 10-25-07: "This isn't really a 'do nothing' congress. It's a 'won't do nothing unless you pay a whole lot for every little thing' congress. Doctors call it fee for service and they love it. The constitution gives congress all the power to set rules for itself and to oversee its ethical standards. So congress has made it legal for its members to accept bribes. I don't think the founders ever imagined that we would elect 535 people so morally corrupt. The majority of them are taking bribes with both hands while chanting, "Get Bush. Get Bush." Barrack Obama claims to represent ethical purity. With a close care for words that Bill Clinton would respect B. O. claims not to accept money from special interests. But apparently he will accept massive bundles from the same men who give special interest money to other candidates. Part of what is 'new' about B. O. is that he is the 'new' one being given a pass by most reporters."
Betsy, sorry but I had intended this post for the next thread down. Can you move it? Or do I just need to repost down there?
Since I'm addressing you directly, I'm wondering about the answers to some of those quizzes on your teacher page. The first lines of books was tough. Are the answers available somewhere? (Though Buddenbrooks was a bit easy. And there is something about Thomas Hardy's prose that makes it really stand out.) I was involved in something like that when I was in high school in 1965. It was a TV show like College Bowl called Reach For The Top that was on in Fresno, CA. But, if your students do well on a lot of those quizzes they are much better prepared than our team was. And we were season champions.
Chris M.,
You said it all when you said, "There is little in the present set up in Washington that motivates congress to do what is best for American citizens".
It's about self-service, not public service, with these career politicians.
Post a Comment