Congress’ mob mentality

In the best of times I’m not a great fan of our federal government. I subscribe to the Jeffersonian notion that the government which governs least governs best. Thus, I have never had great admiration for our Congress, since for the most part, it seems to me that its members exist primarily to constitute a mutual admiration society dedicated to bringing home as much funding as possible regardless of the merit of the funded projects, enjoying the ministrations of thousands of lobbyists, and ensuring that sitting members of Congress get re-elected. But as cynical as I am normally about Congress, its recent transformation into a lynch mob focused on destroying the lives of greedy AIG employees still dismays me.

Let me be clear. I don’t like what AIG and its executives have done. In fact, I detest their actions. But I dislike more the idea that Congress believes that it can use its powers to target individual citizens and pass ex post facto laws to punish them, let alone that individual congressmen can actually suggest that these executives be murdered. Never has Congress sunk so low, in my opinion.

I find it particularly ironic that, at the same time President Obama has insisted that Guantanamo be closed and that those who have been detained there be tried in federal courts and given due process of law, Congress has decided that it can deny AIG executives due process rights. They do not want to give those receiving the bonuses a fair hearing and a day in court, but instead cheer on what is nothing less than a lynch mob and pass tax legislation to tax bonuses after they have been given out.

I think President Obama needs to speak out against those in Congress behaving in this way and should announce that any ex post facto legislation passed by Congress will be vetoed. We ought to be willing to give the same protections to American corporate executives, even greedy, irresponsible ones, that we give to accused terrorists.

What I find even more ironic about the legislation proposed in the U.S. House is that it is both bad law and, most probably, will be ineffective. Many legal scholars doubt whether this legislation is constitutional; I believe that it is not. It’s also unwise because many of the AIG employees involved in the current debacle reside in London and, as far as the public knows, may not even be American citizens. How does Congress intend to collect these so-called excise taxes from non-resident aliens?

In fact, I think there’s a far better way to deal with the AIG and other corporate bonuses. Shareholders of these companies, including the U.S. government, have the right to bring what are called “shareholder derivative suits” against these companies and executives on the grounds that the bonus contracts were fraudulent, beyond the authority of the executives, and, in many cases, the result of illegal conspiracies. We should let the court system, which handles these types of disputes, handle these cases as well.

Finally, before we get ready to resort to mob violence against the irresponsible executives whose greed brought on the current crisis, we ought to look also at the members of Congress, like Christopher Dodd and Barney Frank, and the members of both the Clinton and Bush administrations who not only created the legal and political situation which led to these excesses but also failed to warn the American public about the disaster which was in the making. I suspect that there’s quite a lot of guilt to be spread around Capitol Hill.

There’s one final bit of irony I feel I should mention. Last week, when I grew tired of the strident voices calling for blood in the media I decided to contact Rep. Barney Frank, chairman of the House Financial Services Committee. I thought that I would suggest the idea of shareholder suits to him.

Much to my consternation, when I went to Frank’s Web page I discovered that not only did he not provide an e-mail address, but he stated explicitly that he and his staff would not accept communications from anyone other than his own constituents. How convenient! A member of Congress paid by the American people won’t listen to any citizen other than those who can vote for him. So much for Frank’s constant reiteration in the media that he serves the American public.

My point, really, is simple. Giving bonuses to AIG executives after AIG received bailout funds was irresponsible and wrong. But they’re not the only ones who have acted badly. It seems to me that Congress and the administration need to clean their own houses and accept their own guilt before they decide to lead the lynch mob against individual American citizens. Let the courts handle the executives; Congress has enough problems of its own to solve.