Financial executives have spent so much time testifying before Congress these days that earlier this week, The Hill offered CEOs a Dos-and-Don’ts guide to staying on lawmakers’ good side. Something tells me that the good folks at the Security Traders Association of New York (STANY) haven’t read it.
In a letter to the Senate Banking Committee today, the STANY offers a hilariously hyperbolic plea for rejection of the 90% tax on bailout bonuses that the House passed last week. You can read the full letter right here, but here are some key passages …… here, STANY visibly shakes its collective head at the idea of a bonus tax, asking senators what the Founding Fathers would make of congressional anger over executive compensation:
Whether retroactive, punitive taxes upon bonuses that were contractually mandated prior to the government’s involvement in A.I.G. are legally immutable or not, the use of taxation to punish a select group violates the principals upon which this country was founded. The government’s reaction to the bonuses undermines businesses’ faith in the government, which will frustrate the purposes of the relief programs aimed at economic recovery. At a time when the government is unveiling programs to encourage private investor to partner with it, we need a government that can be counted on to not change the rules of the game.
Then STANY goes on to suggest that any limits on executive bonuses might force businesses to not cooperate with the Treasury Department’s new bank rescue plan:
This kind of retroactive, emotional rulemaking negatively impacts the incentive of parties to do business with the government and with firms that partner with the government. Now is the time when Wall Street and the federal government should be working together to implement viable solutions to improve the economy. Reactionary policies, such as H.R. 1586 serve to make businesses leery of such a partnership.
Even as the STANY praises AIG executive Jake DeSantis for his resignation op-ed in yesterday’s New York Times, it admits that DeSantis could have feigned the whole thing:
Whether this letter which has received a tremendous amount of buzz since being posted is a legitimate resignation letter or not, the sentiments are shared by many on Wall Street.
The letter contains at least 10 grammatical errors, according to my informal count — including the spelling of President Obama’s name as “Barak”. Perhaps The Hill can write a follow-up with tips on how to draft a letter to the Capitol.