The recent bonuses paid to executives in the financial division of AIG have created a firestorm. In response to the national outrage, the government has bent over backwards to find some loophole that would allow it to take back these bonuses, bonuses that were not shadily distributed to these executives but were contractually promised to them. The most recent proposal, which has already been passed by the House, is to apply a retroactive excise tax of 90% to these bonuses.
Legal experts say that such a law is unconstitutional because it may violate Bills of Attainder and Ex Post Facto laws and is likely to invite years of lawsuits. The government, however, is willing to take this risk. What is the government’s motive in passing this tax?
Perhaps it is an attempt to win the support of a public rabid that its money is going into the pockets of the traders said to be responsible for AIG’s financial mess. Or maybe politicians are trying to distract us from their own incompetence and shift the blame of the failed economy onto the “greed and recklessness” of these traders.
Whatever their motive, it is certainly not that which this country’s political system was founded on. The Founders of this nation recognized that individuals have an inalienable right to live freely, work to better their lives, and keep the fruits of their labor. They created a government whose purpose was to protect our right to life, liberty, and the pursuit of happiness. In the case of the AIG bonuses (and in many other cases today), protecting individual rights is the last thing on most politicians’ minds.
While politicians continue to pay much lip service to the idea that their proper role is to protect individual rights, they certainly don’t do so in practice. Influenced by lobbyists and public opinion, they are no longer motivated to protect and implement the spirit of American law, which is to protect the rights of American citizens, not violate them in pursuit of power or popularity.
For example, Obama wants to “pursue every single legal avenue to block these bonuses.” He and others like Senator Chris Dodd poignantly claim that the bonus money belongs to taxpayers. They are not, however, actually concerned with who has a legal right to this money. They ignore the fact that AIG made a legally binding promise to pay these retention bonuses, a promise that was upheld by Senator Dodd himself in an amendment he wrote in the bailout, recognizing pre-negotiated bonuses.
The public mob is thirsty for the blood of these individuals, and politicians, instead of protecting the victims, are plotting ways to hand them over. For example, Congressman Barney Frank has openly threatened to reveal the identities of these individuals if they don’t return their bonuses. Instead of taming the public flames and upholding the sanctity of the law, today’s political leaders are catering to the public’s whims to advance their own causes.
If politicians forego the responsibility of protecting our rights and instead are swayed by personal and social motives, whose rights will be violated next? If the government can impose an excise tax on these AIG traders, what will stop it from extending the same tax to any other individuals the public deems undeserving of their contractually promised bonuses? What will stop the government from violating any contract the public does not agree with?
Our government has made it clear that it is perfectly willing to tiptoe around the letter of the Constitution to meet public demand. Such a government will always be able to find loopholes to enact whatever agenda is brought to the table.
More than two thousand years ago, Socrates was condemned to death by hemlock because the public believed his ideas were corrupting the youth. Unless our political leaders start acting to protect our rights, we are heading down the same road of mob rule, and America will no longer be the champion it once was of freedom and individual rights.
The Undercurrent is a magazine distributed at college campuses and communities across the country. We release a print edition once per semester, and in the interim, regularly post additional articles, blog entries, and campus media responses reports to our website.
The Undercurrent's cultural commentary is based on Ayn Rand's philosophy, Objectivism. Objectivism, which animates Ayn Rand's fiction, is a systematic philosophy of life. It holds that the universe is orderly and comprehensible, that man survives by reason, that his life and happiness comprise his highest moral purpose, and that he flourishes only in a society that protects his individual rights.
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