Congress-What's That Brown Stuff You Stepped In?

If you're lucky, members of the House, it's just mud. But step in it, you did!

I blogged yesterday about what I thought was an asinine move by Congress - to set a 90 percent tax on those bonuses given to AIG executives. I was a bit worried about putting my opinion out there, simply because it was pretty much lockstep in line with Andy Parks, my longtime friend and morning host at WMAL whose opinions are usually somewhat to the right of my own.

In this case, Andy was right. And Congress was wrong. How do I know this? Just take a look at today's Washington Post Op-Ed page...

The main editorial, titled Washington Gone Wild, took lawmakers to task for "currying favor with the public", and went on to say "the House had the feel of a mob scene" and "Elected officials have a responsibility to lead, not just to pander; to weigh what makes sense for the country, not just what feels good."

Two conservative columnists, Michael Gerson and Charles Krauthammer, also (somewhat predictably) attack Congress' actions on the op-ed page in the Post, and even liberal columnist Michael Kinsley points out that all of this current outrage of the AIG bonuses could have and should have been debated by Congress MONTHS ago. Kinsley even finds it tough to give the Obama Administration a pass.

Finally, on the business page of the Post, Steven Pearlstein's column is titled Let's Put Down the Pitchforks. Pearlstein says "the reality is that we can punish the bankers or we can save the banking system, but we can't do both at the same time." He goes on to say:

At the moment, the Treasury is working (and working and working) on ways to entice private capital back into the banking and shadow-banking system by offering government financing and guarantees against losses. Every dollar of private capital that can be attracted back into the system is a dollar that the Treasury won't have to borrow or the Federal Reserve won't have to print. And only with the return of private capital will the government be able to get back the rescue money it has committed.

But how eager do you think private equity and hedge funds will be to invest those billions of dollars if they fear that their participation will subject them to front-page accusations, congressional inquiries and public outrage over how much they might be paying for bonuses or employee travel or office decoration? Will they participate if they think that Congress, in a moment of populist pique, will try to tax back their profits if they earn more than originally expected?

At the end of the day, we still have to fix what's broken. We can't do it without the help of the private sector. And we need our elected leaders to have their heads in the game - not distracted from the conversation because they are too busy poking their fingers in the air to see which way the wind is blowing!

Do You Feel Better Now, America?

Our economy is falling apart, but rather than take positive action to try and solve the problems that we've basically caused for ourselves, we Americans are demanding that our lawmakers shake their fists and seek retribution. So that's what they've done!

The House has voted overwhelmingly to impose a 90 percent tax on 165 million dollars in bonuses that were received by executives at AIG. Never mind the fact that these bonuses were legally negotiated and agreed upon MONTHS before AIG tanked. Never mind that Congress cleared the way for the bonuses to be handed out before word leaked that they had been given. Never mind the fact that no one in either the Bush or Obama Administrations or in Congress tried to negotiate away these bonuses when they were negotiating with AIG. And never mind the fact that there is a good chance this new law, if it passes, won't hold up in a court of law. Congress is out to get its pound of flesh, and by God, it's going to get it!

Do I condone the fact that these executives are getting their bonuses after basically failing at their jobs? No, of course not! But it's far more important that our lawmakers respect the law of the contract in this country than it is to fall prey to what is essentially an angry mob! All that's missing here are the torches and the rope!

These obnoxious blowhards on Capitol Hill are ranting and raving because they are hearing from constituents who want a piece of flesh - they are reacting out of fear and anger. They are giving voters what they want to hear... and they are trying to give their constituents a small measure of "justice". But this is not justice. It's a power trip.

Congressman Barney Frank is demanding that AIG name names. He wants these executives apraded out in the public square - no doubt so they can be figuratively tarred and feathered. Did anyone see the tar and feather scene in "John Adams"? That's what Congressman Frank is demanding be done here.

Contrary to what cliches you may hear, contracts in America are NOT, in fact, made to be broken. If Congress can do this to the "bad guys", then they can do it to you. What if you have a contract that Congress decides is not in the best interests of America. Will they come after you next?

There are good contracts out there and bad contracts out there. But there hasn't been a contract written yet that hasn't been signed by two parties agreeing on something.

We're talking about far more than 165 million dollars. We're talking about working to fix an economic crisis that's several zeroes larger than that, instead of wasting time getting angry just to make each other feel better.

And more importantly - we're talking about having our lawmakers following well-reasoned and thoughtfully-crafted laws instead of changing it up as they go along on a whim of anger to appease voters.

This time, it's AIG. Who's to say the next time it won't be YOU?