Friday, March 20, 2009

Moral of the story

What everyone should be learning from the AIG mess:

Congress: If you give a company money, they might not do what you want them to do with it. So don't give money to failing companies.

Failing companies: If you accept money from the government, they might tell you what to what to do with it. It's better to declare bankruptcy and start from stratch than it is to go down this road.

Executives: If you work for a firm that accepts bailout funds, you may have to give your bonus back. Consider signing on with a different company.

Successful companies: Consider what the inflation rate is going to be before issuing any loans or buying bonds.


milton f said...

If one boils this down to its essence, the question really becomes "where does congress get the authority to redistribute our money (tax money) to any company, (or foreign government)?

The answer is to be found in Article 1, Section 6 of the Constitution for the United States of America.

And the answer is...

(wait for it)


NAW! I am not going to spoil it by giving the answer. Your dear readers will have to look it up for themselves.

Anonymous said...

Milton, I think you meant article 1 Section 8.

Anonymous said...

Actually AIG bonuses were written into the bailout legislation as acceptable as long as they were established by February 11, 2009 (two days before the bill passed)

The real lesson from the AIG bailout?


Robert Enders said...

Article 1 Section 8: "The Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States."

I believe that Milton is asserting that Representatives and Senators are allow to redistribute their own Congressional salary in any way that they see fit.

milton f said...

Article 1 Section 8 says:
"The Congress shall have Power to"... and then it goes into an all inclusive list of the things Congress is Authorized to Do.

If it is not listed then they may not do it lawfully (see Amendments 9 and 10).

One interesting phrase in Art.1 Sec.8 is "To exercise exclusive Legislation in all Cases whatsoever..." in Washington D.C.

So it would be lawful for our servants in D.C. to pass a 90% income tax on the people of D.C. and give that money to AIG.

They are NOT authorized to tax the people of Indiana (or any other state) to bailout AIG or any other business.

So, IMHO,the moral of the story is to notify your congress-persons that we have had enough, and will no longer tolerate them "intending" to do good things by violating their oath of office.

And a tip of the hat to "Anon" for noticing my typo in the original post...{Hat Tip}

p.s.-Robert-I would never suggest that congresscritters are restricted in using their own funds any way they want...