First bank and financial institutions, then manufacturing and eventually everyone?

A reader left a comment on my last post, "Mob Rule in Congress" supporting something being done with the bonus paid to top talent at AIG. While I agree that this problem exacerbates the social problem of increasing inequality, the idea that Congress should do something unconsitutitonal (in reponse to anger and not the issue my reader raises, growing inequality) I still disagree (strongly) with. why? because will you ever see an angry populace demanding a pay increase for anyone? No. Anytime financial compensation gets into the public view, the resopnse is negative. Whether it be for CEOs, or for teachers, or for police, for legislators, anyone....the public gets miffed about it. I think it has to do with the growing inequality, but the answer is not to pass legislation one "high-paying" job at a time to curb the problem.

The angry mob should be largely ignored...I doubt it will carrry over to the next election.

the growing inequality should be dealt with by a more progressive tax structure (though I detest the idea of increasing taxes on work....let those who performed for their bonus have it, but those who just reap the dividends of others' work...capital gains, should be taxed at least as much as work).

Pass legislation making unions more relevant, easier to form, collectively bargain all state jobs...though a good argument can be made not too, but I'd still support it.

Get the nurses, accountants, police, firefighters, teachers, dental hygienists, SECRETARIES, all unionized, and that would help narrow the income inequality gap very quickly. And it would not be under goverment action.

But, apparently President Obama is not reading my blog. Because he is going to try to legislate compensation. One could argue that since the government owns so much of these banks, that they are the new boss, but it looks like more than that: Here is the full article. Here is the excerpt:

One proposal could impose greater requirements on company boards to tie
executive compensation more closely to corporate performance and to take other
steps to ensure that compensation was aligned with the financial interest of the
company.

And why only tie executives? why not junior exectuvies, secretaries? Why not me, a college professor to how many student credit hours I generate? Doctors are billable hours folks, why not me, or anyone? Nope, I don't agree with this, it is not for the defensible reasons (decreasing social inequality), it is for purely political reasons and of the worst kind--anger. this is not leadership. This is little different than what George Bush did with the Iraq war.

Mob Rule in the Congress

All the public outrage at AIG paying bonuses to its top people with public money lead Congress to pass an unconstitutional law to tax those bonuses at a 90% tax rate. While I can appreciate the political win this was for Dems, because the angry public will like what Congress did, but half of Republicans voted for a 90% tax bracket. Genius.

Nevertheless, passing an obvious unconstitutional law, even though it will never get through the Senate, is a momentous waste of time. There is serious stuff that needs to be done. Anger like this is a flash in the pan, these political stunts don't address the anger that will still be there a month from now.

We blew up our constitution in a fit of fear following 9/11 and now anger over legal employment contracts, lead to a willingness to violate the constitution. Shameful.

President Obama nailed it on the head on Leno's show, these practices are legal. And that is a problem.

But, if President Obama thinks he can handle all this stuff with laws, he is nuts. The money will find a way.

The AIG bailout is a distraction from the much more serious issues facing us. Even the price tag of the bonus is dwarfed by the what, trillion that the government has printed? Here comes inflation to eat away at my retirement...what the market downturn didn't get, inflation can eat away at, too. Yippee.

I hope President Obama can fix this mess. But, I don't think anyone, really, if they are honest, really knows how to do it. There are ideologues of all stripes, but they operate more on maintaing the truth of their ideology than fixing the problem.