A Dealbreaker commenter points out: “The bill that just passed is saying that anyone working for those firms with a combined family income of $250k or more will have the bank employee’s bonus taxed at 90%.”
The reason for this, which I hinted at yesterday, is that its difficult to get such a directed tax bill to pass constitutional muster without widening the people it impacts. If you think it is an accident that the bill has been set up this way after executive comp failed badly on the first two go-arounds, then you just don’t understand the meaning of “never let a crisis go to waste.”
I expect that anyone who watches carefully for the inevitable “But we had to expand the reach of the bill to make it legal,” will be rewarded with almost exactly this line from proponents of the newly expansive bill. This is both because the legislature can’t simply target a subset of individuals with punitive intent, even if its a tax, and because the goal was always an expansive executive comp cap.
The “bill of attainder” test keys off these two prongs:
Is it targeted at specific individuals?
Is it of punitive intent?
So what’s punitive intent? The Fifth Circuit’s SBC Communications v. FCC ruling is about the most direct on this as the Supreme Court hasn’t touched the issue in decades. In short:
Does the legislation fall into the historical meaning of legislative punishment,
Can the statute “reasonably be said to further nonpunitive legislative purposes,” and;
Does the record show “a congressional intent to punish?”
We leave it to you to decide where these prongs fall on the “punish-o-meter.”
What is the specificity prong? No one really has any clue as the Fifth Circuit (which effectively invented it) declined to address it in SBC.
All this overlooks the fact that Bill of Attainder jurisprudence is in quite a bit of disarray and this would make for a very juicy (and time-consuming) case if it went to the Supreme Court. The legislature, and the New York Attorney General, is hardly helping itself with the level of punitive sounding rhetoric that daily issues forth from those offices to clog the public record. Neither would it serve the legislation if anyone bothers to recognize that AIG was basically given the green light by the very people now up in arms over the “outrage” of these bonuses, and that they have been “approved” since 2008.
So, instead it looks like, in order to avoid that particular courtroom morass, we will get a wide-ranging executive compensation cap of the sort that was violently resisted not a few months ago. And no one dares vote it down now. Hurray for our side!

You knew AIG was going to be shedding assets as quickly as humanly (or inhumanly) possible. You also knew that some of this stuff was going to go at firesale prices. Be this as it may, the panic sale of AIGs buildings is something of a surprise:

Six months ago, sources had estimated that 70 Pine St. could command between $310 million and $385 million, in part because the Art Deco Tower with its lovely architectural details and relatively small floor plates would have made an ideal condo conversion. At this point, however, it is highly unlikely anyone would want to convert the tower in a deepening recession that has already sent apartment prices reeling and left a vast number of units vacant.

Ouch.
AIG HQ to sell at fraction of price [Crains New York]

Britain’s serious fraud office and U.S. regulators are combing through the records of AIG’s Financial Products Group, formerly located on the fifth floor of an office building in London’s
The unit’s small group of traders risked nearly half a trillion dollars to insure U.S. mortgages and other debt using complex financial products called credit default swaps, according to recent congressional testimony.

$280 million of the in-falling currency matter apparently went to the group’s head, Joseph Cassano, over the course of the last eight years.
Just… wow.
AIG’s Small London Office May Have Lost $500B