Thursday, March 19, 2009

NHS Blog Doc: AIG RBS Obama

Dr John Crippen must be congratulated for his piece on The Act of Attainder. Looks like someone is using it. His name is Obama and he is currently the President of the United States.

The New York Times:
House Passes Heavy Tax on Bonuses at Rescued Firms
Published: March 19, 2009

"The House overwhelmingly approved on Thursday a near total tax on bonuses paid this year to employees of the American International Group and other firms that have accepted large amounts of federal bailout funds, rattling Wall Street as lawmakers rushed to respond to populist anger.

"Despite questions about the legality of the retroactive 90 percent levy, Democrats and some Republicans said the tax on bonuses for traders, executives and bankers earning more than $250,000 was the quickest way to show angry Americans that Congress intended to recoup the extra dollars. Even backers of the measure noted it was an extraordinary step.
"But the rush to curb the bonuses by lawmakers, many of whom have previously been torn about limiting executive compensation, reflected Congressional anxiety about heightened public dismay over the bailout. The Senate is expected to consider a similar tax on bonuses but has some differences with the House, which could slow final action.
"In a statement, President Obama suggested he was supportive of the legislation, urging Congress to deliver a 'final product that will serve as a strong signal to the executives who run these firms that such compensation will not be
"The legislation would apply to bonuses paid to executives at companies holding at least $5 billion in bailout money and would essentially wipe out the phenomenal paydays that have been a tradition on Wall Street, at least until the firms reduce the amount they owe taxpayers to less than $5 billion.
"According to a tally by The New York Times of bailout recipients, employees at 11 institutions — including Goldman Sachs, Bank of America, Citigroup, Wells Fargo and JPMorgan Chase — would face restrictions immediately.
The current version of the Senate bill would apply to an even wider array of companies. It would tax bonuses at companies that received as little as $100 million in federal bailout assistance, though at a lower rate.
"In response, financial institutions that have received federal bailout money mounted a broad assault Thursday on the House legislation, which was opposed by leading Republicans. But nearly half of House Republicans joined Democrats in supporting the measure, which was approved by a 328-to-93 vote.

"Its backers said the companies had forced Congress to act by inexplicably handing out generous rewards to employees after tapping taxpayer funds to survive an economic calamity brought on by irresponsible and risky executive decisions. A.I.G. gave out $165 million in bonuses, saying the payments were essential to retain employees who could help the company sort out its financial problems.
"'Have the recipients of these checks no shame at all?' asked Representative Earl Pomeroy, Democrat of North Dakota. Summing up his personal view of the so-far-anonymous A.I.G. executives, he said: 'You are disgraced professional losers. And by the way, give us our money back.'"

Will the United Kingdom act in a similar fashion for RBS and others when we actually have the Act of Attainder to back it up? Would some heads start to roll?

© 2009 Am Ang Zhang

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