Evan Newmark over at the WSJs Mean Street sums yesterday's bill up nicely:
https://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_lewis&sid=atlHxXH7FweQThe most depressing part was that it wasn’t even close.
By a vote of 328-93, the House of Representatives voted for a special tax on evil Wall Street bankers for their crimes against humanity.
That is a 3:1 margin. Apparently at the Capitol, it is better to be a coward who keeps his job, than a man who keeps his dignity.
Too harsh a judgment on our duly elected representatives of the people?
Not at all. In fact, too charitable. Congress may be acting at the behest of the mob. But nothing should excuse that institution’s shameless and shameful behavior over the AIG bonuses.
Nothing.
You can try and put aside all of Congress’s nasty, vile words as predictable Washington grandstanding. But the words have been too jolting and over-the-top to be easily dismissed. Senator Chuck Grassley’s suggestion that AIG execs kill themselves may just be an Iowan’s failed attempt at irony.
But Thursday there seemed to be little irony when Congressman and bill sponsor Charlie Rangel of New York accused Wall Street of single-handedly destroying America. “These people are getting away with murder. They’re getting paid for the destruction they caused to our communities,” he said.
It is an odd accusation. Rangel’s district–like all of New York City–has been living off of Wall Street’s bonuses and tax revenues for years.
I should know. Rangel, a long-time beneficiary of rent-subsidized housing, is my Congressman.
But who ever said that politicians were good with the details? Just look at the messy House draft of the bill. It’s shoddy populism masquerading as tax law. The bill is retroactive and arbitrary. Its objective is vengeance and punishment, not raising funds.
Apparently, if you are a dual-income Manhattan couple earning more than $250,000 a year, one of whom happens to work at a TARP bank, you are America’s new criminals.
Say goodbye bonus and goodbye bank. You can’t afford New York without your bonus. So you will have to leave the TARP bank–just as thousands and thousands of your colleagues undoubtedly will.
I already hear the cries from all the aggrieved taxpayers. Who cares? Where else will they go on Wall Street? They are all overpaid greedy good-for-nothings, after all. But guess what? If this bill passes or some form of it–the biggest loser will be you, the U.S. taxpayer.
The good banks like Goldman Sachs, Morgan Stanley, J.P. Morgan and Wells Fargo will figure a way around this bonus madness and pay off the TARP loans. And the taxpayer will be left holding the bag of American International Group, Citigroup and Bank of America, where the taxpayer has invested at least $260 billion.
The labor market, even for ne’er-do-well bankers and traders, is still a free market. So senior Wall Street talent will desert these banks. And these banks may be full of people you can’t stand. They may be dysfunctional and disgraced. But don’t forget. They are your banks now.
I, like most Americans, am angry that some undeserving execs will walk away with millions of dollars in undeserved bonuses. But I don’t let anger blind me or a re-election campaign guide me–unlike, apparently, three-quarters of our House of Representatives.
Minority Leader John Boehner of Ohio, who voted against the bill, said, “This bill is nothing more than an attempt for everybody to cover their butt up here on Capitol Hill.”
But he’s too generous. This bill is much, much worse than that. It is mob rule. It is an abdication of the duty of Congress to legislate thoughtfully and with due process. And it is an act of cowardice in which what is right or wrong means nothing and what is expedient means everything.