Larry Tribe thinks a clawback tax of AIG's bonus-receiving executives would not violate the Bill of Attainder clause. Hat tip, Nate Silver, who thinks it would be a bad idea. The sainted sanctity of contracts certainly is doing the bailout no favors, either here or with regard to cramdowns of securitized mortgages. Anna Gelpern and Adam Levitin, by the way, have a proposal for making those rewrites happen here.
UPDATE: I open the Times today only to see that Larry Cunningham - my co-author - has a characteristically insightful take on the legal remedies that the government might pursue.
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1. Posted by fedgovernor on March 18, 2009 @ 4:39 | Permalink
Would it be Constitutional?
Everything is Constitutional that isn't ruled unconstitutional by the Supreme Court. And if it never sees a courtroom, then it's ipso facto Constitutional. And this will never see a courtroom.
Why? Because it's all Kabuki designed to divert you from the fact that the Obama Administration is laundering $90 billion of US taxpayer money through AIG to foreign millionaire bankers.
It's the largest bank heist in history.
2. Posted by TaxRascal on March 18, 2009 @ 9:56 | Permalink
People are still avoiding the question of who, specifically, is getting these bonuses: http://www.taxrascal.com/why-barney-franks-phony-aig-outrage-is-worse-than-the-bonuses/360/ . Without that information, both sides are just trying to score political points.
It makes sense that the government wouldn't want to know -- what if they find out that they're accidentally demanding that a CTO who saved the company $10 million is getting $500K of that back? And it doesn't make sense for AIG, either (do they really need the competition to know who is making how much from them?). It's leading to lots of posturing on both sides.