Contract Equity:

The events in congress this past week truly could be called March Madness even though they had nothing to do with basketball. This does not bode well for bringing America back from the edge of the ledge on which my country teeters. This of course refers to the bonuses awarded to AIG account managers.

From a constitutional point of view passing laws that target a specific group is directly in breach of the clause to the constitution that forbids bills of attainment. So it seems to me taxing these bonuses simply will not work from a constitutional point of view. As the government now has a majority stake in AIG it would seem that the government can rescind these bonuses and demand that the money be returned. No need to do anything as silly as passing a questionable tax specifically targeted at financial sector bonuses. When congress passed the legislation to provide assistance to the American car industry they insisted that labor contracts be modified and salary levels reduced for those on the assembly line. Rank and file labor had to and did agree to these reductions. The question becomes why congressional leaders are hesitant to demand the same level of sacrifice from employees in the finance area of the economy.

If we pay close attention to the findings or the study of successful societal decision making as put forward by Diamond in Collapse: How Societies Choose to Fail or Succeed we can see that the decisions made must put the makers of those decisions at risk. To say that another way if the decision is a bad decision then those making the decision must suffer along with everyone else. We have seen that no attempt has been made to fix social security largely because congress is exempt from social security. The same is true of Medicare. The congress does not participate in the social welfare programs they have their own program which is far more liberal in providing benefits.

I think what we must do as a nation is first of all treat people in an equitable manner. If we ask for sacrifice by one part of our society then all must be asked to share in that suffering. To do anything less is an insult to all the struggles that we as a nation have made. If we don’t behave in an equitable manner to all of our citizens then the light of liberty’s torch has been extinguished and the world becomes truly dark.