Sometimes 'thinking like a lawyer' makes for uncomfortable situations and responses. I'm wondering if the thoughts on the law I'm having now are the product of thinking like a lawyer or just thinking. I'm guessing simply thinking because even lawyers I know aren't having the same thought process I am...yet.
Let me start by pointing you to a little portion of the U.S. Constitution that everyone is conveniently ignoring. It's especially irksome that our President, who bedazzled us with his lines about how much he loves the Constitution and how he's taught it for ten years, wants to pretend that this portion only applies when it is politically expedient.
Ladies and Gentlemen, I would like to reacquaint you with an important portion of the Contracts Clause (Art. I, Sec. 10):
Coincidentally, my Constitutional Law professor was easily one of the most dismissive of what the Constitution says and stands for too. Funny how when he didn't agree, he'd turn into a doddering old man...no teleprompters in law school, though. And, at least one 'non-traditional law student' who did not suffer his obtuse act. Nope. Not this girl.
One of my very favorite parts of my law school education centered upon contracts, their creation and their ability to withstand the slings and arrows of outside forces. Contracts built upon agreement between two parties, who bargained for their benefits, offered consideration and leave the bargaining table with the understanding that they now have a legally binding obligation.
I literally cringe when I hear people railing against AIG and the bonuses being paid by the company to its executives or who think it's a terrific idea for bankruptcy judges and lawyers to rewrite mortgage obligations and other debtors' contracts. Even with the understanding that these AIG "bonuses" are being paid in lieu of normally paid compensation in some cases to those in the position to best turn this company around and set an example for other companies. Even with the knowledge that many of the people winding up in bankruptcy court wound up there of their own accord. Even with, more disconcertingly, the understanding that these AIG bonuses and mortgages are, apparently, contractual obligations.
The government (the State) continues to puff its chest and look for ways to dismantle the contractual obligations of companies in the name of 'economic stability.' And, even more idiotically, a US Senator (a Republican no less) suggested on a radio talk show yesterday that the best remedy for AIG executives is the Japanese model of accepting responsibility for failure. You know...SUICIDE. The demonization of the private sector continues and it's sickening.
Do I think people have acted responsibly? No. Do I like the fact that the economy continues to tank and my investments (albeit paltry compared to some folks') have lost over half their value? No. Do I think this government-fingers-in-the-contract-pie will end with this matter? Nope. Do I believe politicians when they yammer on, trying to convince us that 1) they knew nothing of the impending problems YEARS ago, 2) they had no other options but to hand over billions of our tax dollars and 3) they don't want to see government in charge of every single thing in this country? BIG NO.
But, do I like the idea that the government, on a whim, can decide to vacate, alter or otherwise manhandle a legally binding contract? Hell no.
Let's pretend these AIG contracts are in the center of the pond and the federal and state governments desiring to break them are all balled up in one pebble. Toss that pebble in the pond and let's follow the ripples.
How is this type of meddling fair to people who are employed by the companies who accepted bail-out money? If someone signed a contract with one of those companies, devoted themselves to fixing what went wrong (which helps the economy overall), and then a law is passed that negates their earning potential (thanks to the suggested earning cap), how likely do you think it is that the person will stick around and fix what ails the company?
If you are sitting there thinking, "Well, who needs to make that much money anyway?" SHAME ON YOU. First, that's the beauty of America and the dreams we once dreamed. Second, we need to turn this economy around ourselves before the dollar is devalued to the point we lose our gold standard status in the currency realm. Third, it's a slippery slope we're on...very slippery. If these companies can't pay back the TARP money, guess who does? M1. M2. M3. and their kids.
On the other hand, look at the mortgage industry. How much more annoying and time consuming do you think financing everything from your home to your car to a stereo system do you think it will be if the lender knows going in that you have an excellent chance of having the terms of your contract construed to benefit you should you decide, at some point, you can't meet your contractual obligation? Maybe you would never consider doing that, but if other people can, they will (look around!) and that screws the rest of us.
How long until those ripples reach those nations who share a big stake in our economy and who hold securities here based upon (gasp!) what's that?! Oh, yes...based on contracts. When contracts are not worth the paper they are written on, the Big Guys and the Little Guys lose. Period. The potential issues consumers and average Americans face because of such meddling have a much better chance of going to the negative than the positive. The important thing to remember is--the government does not generate its own money...it takes it from us, the taxpayers. So, whether it's throwing good money after bad, or limiting the income of those TARP-receiving companies want to hire, the government will have us coming and going.
Think about it.
Remove the anger, emotion and all that.
Just think about it.
And, thanks much to Neal Boortz who, when I tuned in this morning, was talking about everything I wanted to blog about this morning. Great minds.
Update: Rush points to an article today that spells out who knew what when at AIG...interesting.