First of all their spontaneous reaction to "populist" rage is now open to questions of constitutional legitimacy, and secondly, they look like idiots just reacting without thinking. I get the anger over the sheer greed and thoughtlessness of AIG and Merrill Lynch for giving bonuses to morons who brought about this financial crisis. But to compound this mistake with an another one is ridiculous.
We should not have laws passed on whims of "populism". It was just as dumb when people voted to legislate the California Constitution to define marriage. It would be just as stupid for Government to enact legislation based on the whims of polls, pundits, or the Stock Market. President Obama said very thoughtfully in his interview on "60 Minutes":
The one thing that— I've tried to emphasize, though, throughout this week, and will continue to try to emphasize during the course of the next several months as we dig ourselves out of this— the economic hole that we're in, is we can't govern out of anger. We've got to try to make good decisions based on the facts, in order to put people back to work, to get credit flowing again. And I'm not going to be distracted by— what's happening day to day. I've gotta stay focused on making sure that— we're getting this economy moving again.
Furthermore, in response to Steve Kroft's question on the legitimacy of the bill passed by the House, that would "impose a tax of up TO 90% on the AIG bonuses and on the bonuses of anyone making more than $250,000 a year who works for a financial institution receiving MORE THAN five BILLION IN bailout funds"
President Obama had this to say:
Well, I think that— as a general proposition, you don't want to be passing laws that are just targeting a handful of individuals. You want to pass laws that have some broad applicability. And as a general proposition, I think you certainly don't want to use the tax code—is to punish people.
We have no idea on the implication of what they have done. Furthermore, what kind of precedent does this set for the future? There needs to be a holistic view on what's the right thing to do. The point of leadership is to set policy with a strategic goal, and not to be distracted by the latest policy "trend". Action for the sake of action is not necessarily a good idea, and in the business world, if you don't have the right strategy driving your action plans, it will soon drive you into a ditch and bring a number of inefficiencies within your organization - not to mention have people running around like chickens with their heads cut off.
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