I’m currently a couple doors down from the house where I grew up in Lafayette, Calif., mooching off the neighbors’ wifi (thanks, Roger and Jeane!). And I’m trying to figure out what I think about the House of Representatives voting 328 to 93 today to impose that 90% tax on bonuses paid out by companies getting government bailouts.
My initial reaction is that it’s silly, disingenuous posturing. What gets me most is that, while the AIG bonuses were pretty ridiculous, the most ridiculous bonuses were the ones paid before everything started crashing down. The financial institutions now on the dole probably should be paying out incentive and retention bonuses to key people—they certainly would be if they were in bankruptcy, albeit not with the indiscriminate generosity of AIG. It’s the bonuses that went out to people for past deals and trades that went sour that are the biggest outrage. Figuring out how to get that money back should be Washington’s top priority.
That’s not Washington’s top priority, partly because it’s hard to do. And so Congress is addressing the issue of Wall Street pay in its typical half-baked, ADD-ish way. But at least it’s addressing it. It’s the beginning of the revolt of the fairly rich (against the ultra-rich) that Matt Miller predicted a couple of years ago, and while there’s a danger that it could turn rancid, there’s also a chance that it could force us to confront a few myths—”dead ideas,” in the Miller parlance (sorry, I was just reading his new book in the plane and it’s really, really good and I can’t resist plugging it)—that have polluted American political discourse for decades. The main two I’m thinking of here (again, from Miller’s book) are:
1) Money follows merit
2) Taxes hurt the economy (and they’re always too high)
Which isn’t to say that money doesn’t sometimes follow merit, and taxes don’t sometimes hurt the economy. But our public discussion on both issues has been dominated for so long by silly cant that it’s actually refreshing to see an issue where politicians from both parties can agree that:
1) Some people’s riches are entirely undeserved
2) Some taxes are okay