Ken’s Take:
The Congressional act placing a retroactive confiscatory income tax on the understandably unpopular AIG FP bonuses is already beginning to have an impact — an impact that will certainly slow the untangling of the financial mess, and may even thwart it entirely.
All the Friday Wall Street chatter was about how the government can — on a whim — change the rules of the game in midstream, ditching contracts and agreements when it (the government) wakes up and realizes that its programs are ill-onceived and under-analyzed (i.e. unread) before enactment.
So, word has it that the government was soliciting 200 hedge funds to buy toxic securities as part of a public-private partnership. Reportedly, only 3 have signed up — and it’s my bet that they did so before Thursday’s Congressional action and head for the exits. (It’s ok for them to back out since deals aren’t deals any more).
Similarly, reasonably sound companies that took TARP funds because they were coaxed to do so by the government (think Northern Trust) are scrambling to find ways to pay back the money and walk away from TARP. Reportedly, companies targeted with the TALC program (think student and consumer loans) are doubting whether government assistance is worth the pain.
Bottom line: in one svelte blame-dodging move Congress managed to put the recovery effort back to about square one.
Way to go Nancy & Barney.
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March 23, 2009 at 8:33 am |
Don’t forget Charlie Rangle’s role in the bonus clawback bill. His appearance on FNS was political jujitsu at it’s finest. When challanged on getting campaign donations from AIG he called for public financing. When asked about his own tax issues he said that Congress hasn’t done anything about it so there’s no need to worry.
Rest assured little ones, Nancy, Barney and Chris have lots of help.