Congress is too lenient, banks whine anyway.

Amid the uproar from the public about millions in bonuses to AIG executives, Congress was quick to do some political posturing. Sadly, they still didn’t do much that was right.

  1. The bill the House passed is retroactively adding a tax to money that was already paid. I’d be surprised if this survived a lawsuit. On the other hand, from my understanding of the way tax law works, they’ll have to pay up first and then fight to get their money back.
  2. Obama says, “[this] will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated.” Except it’s only a 90% tax, so obviously it will be tolerated to a certain extent. Your $10million bonus is now a measly $1million bonus. Poor you.
  3. According to the NY Times, “The legislation would apply to bonuses paid to executives at companies holding at least $5 billion in bailout money”. Why? What possible reason could they have for not penalizing bonuses paid by companies that only took $4 billion? Why not just say “any company that owes bailout money”? Somebody’s protecting their special interest here.
  4. “This bill is nothing more than an attempt for everybody to cover their butt up here on Capitol Hill,” [Representative] Boehner said. “It’s full of loopholes. A lot of these people who are getting these bonuses likely live in London. And it’s not clear how raising this tax is going to recover that money.”

Of course, there’s an equal measure of contempt to be doled out to the banks here, too:

“If this stands, you will destroy the value of institutions where the government is an owner,” said Orin Kramer, who runs a hedge fund and helps oversee the New Jersey pension plan.

I’m sorry… How is preventing executives from getting bonuses far in excess of performance going to destroy the value of the institutions? The executives ruined the value of the institutions already. That’s why they needed the government money!

Bank executives, who requested anonymity because they did not want to further alienate lawmakers, said their employees were on edge and many would face severe financial hardship if they were severely taxed on money already paid.

If you’re getting millions in bonuses, don’t come crying to the taxpayers who are paying your bonuses about “financial hardship”. You’re the assholes foreclosing on our subprime mortgages. You’re lucky all you’re getting is a slap on the wrist. In days gone by, we’d have put you to the guillotine.

“If you’re a receptionist and your husband is a doctor, your $5,000 bonus just vaporized. It’s not just the C.E.O.’s.”

I’ve worked for profitable companies and never gotten anything close to a $5,000 bonus. If your failing company is giving 5 grand to every receptionist, maybe that’s part of your problem. Again, quit whining. You’re whining to the people you’ve fucked over. We don’t want to hear it.

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