'Are we a banana republic?'

Rick Moran
John Hinderaker asks the question:

I'm stupefied to find that some people are defending the constitutionality of Nancy Pelosi's discriminatory, confiscatory and retroactive tax on people who receive bonus income from companies that got TARP money. I would have considered it a bright line rule that the government can't identify a class of unpopular people and impose a special tax on them. What's next? A 100% income tax on registered Republicans, retroactive to last year? If Pelosi's bill passes muster, why not?

One theory, presumably, is that since the government is contributing TARP money it can put whatever strings it wants on that money. (Including, I guess, strings imposed after the fact that would deprive employees of agreed-upon consideration for work they've already performed.) But that theory has been rejected in a variety of contexts. The government cannot condition its spending on a relinquishment of constitutional rights. Here's a thought experiment: how about putting a condition (retroactively, of course) on TARP money that says no employee of any bank that receives such money (or his spouse) can get an abortion? Would Nancy Pelosi think that's constitutional?

Wells Fargo didn't want any TARP money, but the government forced it to take more than $5 billion worth, so Wells Fargo employees who receive bonuses would be subject to Pelosi's proposed tax. Say you're a teller at a Wells Fargo branch in Minnesota and you're married to a lawyer who makes $250,000 this year. You get a $10,000 bonus for your good work during 2008. The government steals it all (90 percent federal plus 8.5 percent state plus, unless it's included in the 90 percent, 3 percent Medicare). That is simply insane.

If the Pelosi bill is actually enacted into law (which I still think is doubtful) and upheld by the courts, there is no limit to the arbitrary power of Congress. In that event, we have no property rights and there is no Constitution--no equal protection clause, no due process clause, no impairment of contracts clause, no bill of attainder/ex post facto law clause. Instead, we are living in a majoritarian tyranny

In a perfect world, the idiots who are partly responsible for the world wide financial mess wouldn't get bonuses and would lose their jobs while their employer went under. But we don't live in a perfect world. We happen to live in a nation of laws. And while I think John stretches the point a bit (obviously, for effect) his thesis is absolutely correct.

I would add that I believe here is where the Senate has a traditional role to slow the process down, to let passions cool a bit before acting. (The senate has smartly delayed acting on the measure.) What Pelosi did may have been popular (it was bi-partisan hypocritical posturing), but the constitutional issues will no doubt prevent the government from carrying out this draconian, confiscatory plan.

A banana republic features governments that arbitrarily change the law to suit their interests or the interests of their cronies. Peter Robinson of NRO added this to John's missive:

As it happens, just a couple of weeks ago I found myself having this very conversation with a Cuban and a Colombian.  Both were close and longtime observers of Latin American politics and experts, therefore, on banana republicdom.  They insisted—just insisted—that Barack Obama was moving us in that direction, and fast.

I had a much harder time refuting their argument than I'd have liked.

The fact is, the Democrats are doing things in Congress and the White House that are far beyond what Bush and the Republicans ever even contemplated. But setting up a "tyranny of the majority" is easy when no one calls you out for it.

 


John Hinderaker asks the question:

I'm stupefied to find that some people are defending the constitutionality of Nancy Pelosi's discriminatory, confiscatory and retroactive tax on people who receive bonus income from companies that got TARP money. I would have considered it a bright line rule that the government can't identify a class of unpopular people and impose a special tax on them. What's next? A 100% income tax on registered Republicans, retroactive to last year? If Pelosi's bill passes muster, why not?

One theory, presumably, is that since the government is contributing TARP money it can put whatever strings it wants on that money. (Including, I guess, strings imposed after the fact that would deprive employees of agreed-upon consideration for work they've already performed.) But that theory has been rejected in a variety of contexts. The government cannot condition its spending on a relinquishment of constitutional rights. Here's a thought experiment: how about putting a condition (retroactively, of course) on TARP money that says no employee of any bank that receives such money (or his spouse) can get an abortion? Would Nancy Pelosi think that's constitutional?

Wells Fargo didn't want any TARP money, but the government forced it to take more than $5 billion worth, so Wells Fargo employees who receive bonuses would be subject to Pelosi's proposed tax. Say you're a teller at a Wells Fargo branch in Minnesota and you're married to a lawyer who makes $250,000 this year. You get a $10,000 bonus for your good work during 2008. The government steals it all (90 percent federal plus 8.5 percent state plus, unless it's included in the 90 percent, 3 percent Medicare). That is simply insane.

If the Pelosi bill is actually enacted into law (which I still think is doubtful) and upheld by the courts, there is no limit to the arbitrary power of Congress. In that event, we have no property rights and there is no Constitution--no equal protection clause, no due process clause, no impairment of contracts clause, no bill of attainder/ex post facto law clause. Instead, we are living in a majoritarian tyranny

In a perfect world, the idiots who are partly responsible for the world wide financial mess wouldn't get bonuses and would lose their jobs while their employer went under. But we don't live in a perfect world. We happen to live in a nation of laws. And while I think John stretches the point a bit (obviously, for effect) his thesis is absolutely correct.

I would add that I believe here is where the Senate has a traditional role to slow the process down, to let passions cool a bit before acting. (The senate has smartly delayed acting on the measure.) What Pelosi did may have been popular (it was bi-partisan hypocritical posturing), but the constitutional issues will no doubt prevent the government from carrying out this draconian, confiscatory plan.

A banana republic features governments that arbitrarily change the law to suit their interests or the interests of their cronies. Peter Robinson of NRO added this to John's missive:

As it happens, just a couple of weeks ago I found myself having this very conversation with a Cuban and a Colombian.  Both were close and longtime observers of Latin American politics and experts, therefore, on banana republicdom.  They insisted—just insisted—that Barack Obama was moving us in that direction, and fast.

I had a much harder time refuting their argument than I'd have liked.

The fact is, the Democrats are doing things in Congress and the White House that are far beyond what Bush and the Republicans ever even contemplated. But setting up a "tyranny of the majority" is easy when no one calls you out for it.