Last year, when George W. Bush started handing out cash to major banks and corporations, there were very few strings attached. At the time, conservatives (at least the ones who were paying attention) were screaming about the fact that the handouts were clearly unconstitutional. The complaints fell on deaf ears.
Fast forward about six months. Barack Obama comes to power and, in February, signs another unconstitutional law. This time, the government is granted the power to control the salaries of executives running businesses that had not yet paid back their bailout loans.
Later, Barney Frank suggested that the law should be made even more unconstitutional by extending it to cover ALL executives, whether they’d taken TARP money or not.
Until now, Dems had wisely opted not to take any further action in the matter.
Today, however, Obama decided it was time to get tough.
Execs at 15 companies that have yet to repay their bailout loans will have their salaries slashed. The lucky ones will lose 50% of their pay, while the not-so-lucky will lose up to a whopping 90%.
Never mind that there is nothing in the Constitution granting the government power to bailout failing companies.
Never mind the fact that the Constitution specifically forbids the taking of personal wealth or property without compensation.
Never mind that the contract these companies signed with the government contained no provisions that would allow the Obama administration to take this action.
Never mind that the president, for a time, refused to even allow these organizations to repay the loan, opting instead to maintain control over them.
Clearly, to this president, quaint notions like the Constitution and legal precedent have little meaning. Time and again, he shows that he has no respect for our founding documents, and the courts are simply another tiny obstacle in his plan to “remake America.”
Populist drones on the left will, of course, mock the wealthy that have just had their paychecks stolen by this out-of-control megalomaniac. However, thinking people can see the slippery slope.
It’s easy to envision a future where crooks like Frank get their wish, giving the “Pay Czar” the power to control ALL of our salaries.
What’s that? You don’t make millions, so it won’t matter to you? Bury your you head if you like, but remember: According to Obama’s desired tax increases, everyone making over $250,000 is wealthy. If you’re above the 250K line, he considers at least some portion of your income to be undeserved. In his mind, some of those evil profits should be used, as he put it, to “spread the wealth around.”
Wouldn’t it just be easier to let the Pay Czar cap ALL annual net pay at two hundred and fifty thousand?
Politicians and movie stars will, of course, be exempt.
- Robert Laurie
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[...] of top executives from America to countries that will pay them what they’re worth because of Obama’s proposed salary cuts and restrictions will affect every business. Inflation, interest rate hikes, reduced customer spending, and a [...]
Robert – i respectfully disagree with your Constitutional Law analysis above. in relevant part, the Commerce Clause (Article I, Section 8, Clause 3) states: “[The Congress shall have power] To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;” further, the Necessary and Proper Clause states that Congress may “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” i.e., Congress may enact legislation that is “necessary and proper” to exercise an enumerated power. [for reference, see http://en.wikipedia.org/wiki/Commerce_clause
a long line of Supreme Court jurisprudence, dating back to decisions upholding legislative acts of the New Deal, has established that Congress has broad legislative authority under the Commerce Clause. in the present instance, it seems that Congress's bailout legislation (which included provisions limiting executive pay) was a proper exercise of the Commerce Clause, in that the corporate entities accepting TARP funds clearly operate in interstate commerce, and thus fall under Congress's Constitutionally-permitted legislative prerogatives.
notwithstanding the claims of radical strict constructionist-"Constitution-in-exile" folks that this line of Supreme Court decisions were made in error, it is settled legal precedent that Congress may enact laws such as the "bailout", and executive pay could rightfully, by the determination of Congress, fall within the scope of such an act. the principles of judicial restraint and stare decisis strongly support keeping this legislative framework in place.
next, your implication of the "takings clause" of the 5th Amendment is also inapplicable in this instance, since the limits on executive pay are prospective and not retroactive. your claim that the government may not "take" personal property without compensation is correct, but "personal wealth" does not fall under this provision (especially not speculative future personal wealth). [not to mention that, post-16th Amendment, it is clear that the government can take a portion of personal wealth, without compensation, via the income tax.]
while you may have a valid argument against Obama’s decision to limit executive pay on public policy grounds, your view that the move was unconstitutional is not supported by case law. claiming something to be “clearly unconstitutional” does not make it so.
An interesting, and well thought out rebuttal. Much better than the snarky “Obviously you’re not a lawyer” comments you keep sending.
It is, however, fatally flawed. You’re right that I’m not a lawyer, but I am a student of history and the English language.
As most strict constructionists will argue, the right to regulate commerce between the states hinges largely on the definition of the word “regulate.” In it’s late 1700’s definition, it meant, quite specifically, to “Make regular” or “facilitate.” Today, the word regulate is used largely to mean “control.”
If you’re looking for the intent of the founding fathers, look to the language of their time, not ours.
To address some of your other points: You won’t find too many strict constructionists who are big fans of New Deal policies nor do we tend to care for the big government path on which they set us. Most who believe in the strict reading, including many Libertarians, would like to see a repeal of much federal law passed since the depression.
We see a great deal of federal commerce law passed since that time as unconstitional due to incorrect interpretation of article 1 section 8 and incorrect application of the Necessary and Proper clause. I count myself among them. If you need to study up on this, I’d refer you back to your own wikipedia citation, that sums up the strict constructionist argument quite neatly. Interesting that you chose to ignore it.
Also, nothing in the initial TARP bailouts gave the federal government the right to regulate salaries. A law passed after the fact, and signed by Obama, retroactively created it, allowing the government to negate standing contracts that the fed itself had signed.
If you see no problem with that, well, then you MUST be a lawyer. Generally, they’re the last people I trust to protect liberty. They’re much more adept with it’s limitation.
As for “settled law,” I think a solid argument could be made that nothing here is settled, as we’ve never seen a situation like this. The government giving money to a corporation, then passing a new law limiting the way that corporation pays its execs (despite not having made those provisions in the original contract) certainly seems like new territory to me.
Even if I were to agree that it was settled, so what? For 200 years slavery was “settled law.” Just because something is seen as “settled law” doesn’t mean it can’t, or shouldn’t, be overturned by those who view it as illegal and immoral.
And for the record, yes, I think Bush’s initial bailouts were just as illegal as Obama’s pay cuts.
addendum, amplifying on my understanding of constitutional flexibility:
times have greatly changed between 1787 and the present, in ways that the founding fathers did not foresee (they expected jetpacks and flying cars?). the modern economy is many times more complex and globally interrelated now than in 1787. in short, the modern world is a very different place than the colonial world, and the Constitution ought to be flexibly interpreted to evolve along with these economic and technological changes.
Robert – believe me, i am all too familiar with the strict constructionist argument – in fact, i mentioned in passing in my original reply that a strict constructionist likely wouldn’t agree with my interpretation of the law. all the same, my main point stands: under the current prevailing constitutional interpretation, the bailout law was legal. you might argue that under your preferred alternate reality of constitutional interpretation, Congress would not be able to enact such legislation. however, under reality as it presently is, the action was proper. [see http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program#Similar_historical_federal_banking_programs; and http://www.pbs.org/newshour/bb/business/jan-june09/executivepay_02-04.html ("The limits apply to companies who make future requests for what is called "exceptional assistance" from the Treasury. But the plan is not retroactive. Firms that already received funds -- including Citigroup, Bank of America, and AIG -- would be exempt, unless they ask for more money."]
on the other hand, i agree with your penultimate comment, that the law is capable of flexibly changing with the times. in fact, this points to the signature weaknesses of the strict constructionist view: that it is an inflexible, crabbed view of the Constitution, and that the “original intent” of the document is difficult to divine.
the latter problem is evident in your allusion to a 1700’s-era understanding of language. as a starting point, we should consider whether words themselves contain any inherent meaning unless they are read or understood by a percipient (i.e., if a tree falls in the woods and nobody is there to hear it, does it make any sound?)
more concretely, here are a couple of examples from the Constitution that illustrate these difficulties:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof…”
you may recognize this as the religion clause of the First Amendment. based on a 1700’s-era analysis – looking at the intent of the framers themselves, based on contemporaneous accounts – it is nearly impossible to discern the “original intent” of this clause. for one thing, it meant different things to different people, even in the 1700’s. Thomas Jefferson, for example, believed it created a “wall of separation” between church and state. other founding fathers intended that it merely prevented the federal government from “establishing” an official state religion; but left the individual states the freedom to do so themselves (an interpretation shared today by Clarence Thomas).
“A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
depending on your view of statutory construction, the Second Amendment could mean either that Americans have the right to own guns; or that Americans have the right to own guns as part of a “well-regulated” militia only. (see this recent New Yorker piece by Jeffrey Toobin for an interesting historical discussion of the 2nd Amendment: http://www.newyorker.com/reporting/2009/09/21/090921fa_fact_toobin?currentPage=5)
the implication is clear: the same words may mean different things to different people, largely depending upon their pre-conceived notions and personal biases. the same held true at the time of the Constitution’s inception – different founding fathers had different intents with respect to some provisions. this makes discerning a strictly constructed meaning of constitutional language more difficult than you realize.
in sum, as you might guess, i find a strict constructionist view, focused on the “original intent” of the founders narrow and impractical. it is narrow in the sense that it fails to provide the necessary flexibility to adapt and change over time, and impractical in the sense that searching for a unified “intent” is too often a fools errand – the framers themselves had no universally agreed upon understanding for much of the Constitution’s content.
as for liberty, recall that it was a more flexible interpretation of the Constitution that expanded individual civil rights through decisions such as Brown v. Board of Education, Miranda and Roe v. Wade.
in addition, when considering liberty, it is important to consider that there are two different types of liberty; what the French political philosopher Benjamin Constant termed liberty of the moderns and liberty of the ancients.
“liberty of the moderns” is liberty as you understand it – freedom from “x” government action. “liberty of the ancients” hearkens back to Greek participatory democracy and vests in the individual a right to active participation in the democratic governance of the nation. a crucial part of this right is the right of a democratically elected government to enact the legislative program ratified by the electorate through their active participation in the process by voting. there are surely some limits to this legislative right, as provided in the Constitution and consistent with the “modern” understanding of liberty. where this dividing line falls is not always certain and is itself subject to change through the democratic will of the people.
returning back to the bailout, it does not bother me much that the government has acted to limit executive pay – in fact, it seems wholly fair to place such conditions on the extension of government monetary aid to private corporations. the more interesting question is whether such conditions will have the desired practical effect – this would have been a much stronger argument for you to make than to raise dubious points about the overall legality of the legislative act in the first place.
Any time I get into a discussion with someone, and they make the claim that it is impossible to discern the founding father’s “original intent,” I know it’s time to end the argument.
It is extraordinarily easy to determine original intent. True, it’s not always found directly in the Constitution, but a quick cursory glance at the founder’s other writings, letters, etc, will provide the insight.
The “you can’t know what they intended” argument is only made by people who are either uneducated, or those who would, in fact, rather not know. It is the premiere stance of the willfully ignorant.
If the clear, obvious, original intent of the founding fathers is inconvenient for you, I am terribly sorry. However, to claim that it is some sort of etherial, unknowable fact, lost to the mists of time, is utterly ludicrous.
To directly answer one of your examples, I offer this quote from Jefferson, regarding the right to bear arms. “No man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.”
Jefferson’s intent seems pretty clear to me and throughout his writings it’s obviously focused on the individual. That the states have the right to arm militias does nothing to superceed the individual right. This has been borne out in the courts time and again. In most of the country, it’s what you see as the end-all-and-be-all of “settled law.”
I could find similar quotes to refute EVERY one of the arguments you make above, but why bother? Your desire to ignore the facts of history, weasiling your way around the original intent by declaring it unknowable, is a clear indication that you have no interest in fact, only agenda.