Law of the land

[aadler]

 
Years ago — many years ago — I was in a college sports club. This wasn’t just a pastime for me, it was a serious part of my life. Because I was on what I called “the work-study program” (i.e., I studied until the money ran out, then I worked for a year or two — usually for the college itself, to keep myself eligible for club membership — to build up enough of a cash reserve to start taking classes again), I spent ten full years in this same sports club. I chose my classes, and sometimes my work schedules, to accommodate the club’s meetings and workouts. Over the years, I dated between a quarter and a third of the female membership. This particular activity-slash-gathering-of-people was my principal (sometimes my only) activity outside work or classes, and almost the entirely of my social life. I say all this to emphasize just how important it was to me.

At one point, the assistant instructor left the club to devote himself to finishing his graduate work. The club president accepted a promotion to assistant instructor, leaving the presidency vacant. The vice-president … It is difficult for me to express, without using language I would prefer not to post on my LJ, just what an appalling character he was. He hit on the female students, even though (we discovered) he was married. He had passed out campaign posters when running for vice-president, something one just didn’t do in that venue: everybody knew you, and if they agreed you were right for the position, you got their vote; the club was devoted to the sport, and bringing politics into it was unseemly to a disturbing degree. He was the wrong person, in the wrong place, not just at that time but at any time.

Those of us who were serious about the club did not want him to be our president. The resigning president did his best to call a new election, and I was all for it … and the chief instructor, the man who every year submitted himself for re-election but then ruled firmly throughout his repeated terms, said flatly, “No. According to our constitution, the vice-president succeeds if the president is unable to complete his duties.” And that was that, and we were stuck with a thoroughly unsuitable character as our president for the remainder of the year.

I had been part of the attempt to sidestep the rules as they stood, in order to avoid an undesirable consequence; and, when we were called on it, I recognized even then that the resort to fundamental authority, however unfortunate the result, was the way things ought actually to be done. The law is the law, and if the law is wrong, you change the law rather than breaking (or ignoring) it.

I said all that so I could say this:

The attempts to pass laws confiscating the bonuses to AIG executives, or to tax those bonuses at 90% or more, are not only wrong but illegal. Under our Constitution, it isn’t just illegal to do such things, it’s illegal to make such laws. Bills of attainder (laws aimed not just at classes of persons but directed at specific individuals) and ex post facto legislation (enacting laws that alter the legal consequences of an act, after the act was committed) are both specifically prohibited by the U.S. Constitution, and for good reason.

I was against the bailouts, to AIG or to anyone else. My feeling is, if a business fails, let it fail; other businesses will rush in to fill the gap. If, however, you DO give it money to keep it in normal operation, then you have to let it operate normally. A business isn’t a government agency, and can’t be operated by political rules.

What we’re seeing is cynical political grandstanding. It’s also against the law. Allowing it to proceed is a direct threat to this nation.

Comments

[aadler]

Uh, was there a point in there anywhere? Addressing the statements you made, in order:

Nobody takes a product off the market because it’s ‘too good’. They take it off the market if they can’t make a profit from it, or if something else will give them a better profit. Even then, there will always be niches where people are willing to pay more to get the better quality. It evens out.

Companies selling to other companies which then change the business model? What, are you saying someone shouldn’t be allowed to sell a successful business at a profit? Or that the new owners can’t restructure it to suit their own goals? If the result is deficient service/product, well, the customers will take their business elsewhere. And if there is no ‘elsewhere’, that means the new owners are still offering the best deal available.

Dot-com bubbles, real-estate bubbles? That’s why it’s called speculation. People with money risk it in hopes of making more money. The greater the potential profit, the greater the risk they’ll assume. This is the source of funds for investment. Sometimes it doesn’t work out, and there are winners and losers. But nobody is forced to join the game.

(The guy you describe who lost his house to a bad subprime mortgage, when he could have afforded a smaller house with a normal mortgage? He probably should have done the latter. He probably will be more cautious in future transactions.)

Drugs that cause more side effects than what they’re supposed to cure? That would still be a good option if the side effects were crippling but the disease was lethal. And the new drugs are developed by the pharmaceutical companies, not hospitals or physicians; they don’t “raise medical costs” unless people are willing to use them.

The notion of fix-it society vs. throw-it-away society … People buy new products because they want them or need them. Is it wrong, then, to provide something new and better that people will want to use in replacement of something lesser? Should those people be forbidden by law from getting better goods if they can afford them?

No, innovation can’t be stamped out. There will always be an economy of some sort, and people will always come up with new ideas. Clearly, however, some economies are more vibrant and successful than others, and if an activist government managed to choke off only 15% of the innovation that would ordinarily be there, the economic consequences would be horrendous.

As for the difference between big business and small business, I’ve seen the distinction used as a bait-and-switch tactic too many times to have much faith in it. ‘Big business’ is the villain … why, exactly? because it’s successful? because it’s big? I think it’s because there will always be people resentful of anyone who has more than them, and there will always be others willing to cadge for power by stoking and trading on that resentment.

Final word: I don’t trust government to manage the economy better than can be done by free enterprise because the business of government isn’t business. The business of government is governing. Central planning has failed everywhere it’s ever been tried. There was an eighty-year experiment in that — the Soviet Union, I believe it was called — which eventually collapsed under its own economic incompetence.

[jlbarnett.livejournal.com]

I just want the gov't to regulate. To give businesses a reason to search for the exec who'll take 100 million if the company succeeds instead of 400 million if it fails

And Big Business is the villain because small businesses have to fight for their market share with quality goods and services, meanwhile larger businesses are more than willing to get their profits by eliminating competition. THat's bad for customers and employees.

Yes, the guy I knew who could have afforded the regular mortgage should have taken it. But no one should have tried to convince him to take the riskier choice.