The Daily Switch

Private Property: RIP???

Posted by Ender on March 19, 2009

Private Property?

Private Property?

Prosperity cannot exist without the Free Market. The Free Market cannot exist without Private Property. Private Property cannot exist without the Rule of Law. When you attack the law, you attack Private Property, the Free Market and Prosperity.

Last week I linked to an article that stated Obama had started a War on Business. With each passing minute I agree with the theory more and more. One of his latest attacks has been on the Rule of Law. In particular, he is attacking contract law.

When the AIG bonus story broke Obama and Dodd among others were left with egg on their faces. They knew the bonuses were in the package and yet Dodd passed it and Obama signed it. Now, after the fact they are both “outraged” and want to change history. These bonuses are contractual obligations. It doesn’t matter that you don’t like it, it doesn’t matter that it stinks, what matters is the Rule of Law. That’s the funny thing about Law; you don’t get to pick and choose when you follow it. The Law exists to protect our rights, our prosperity. If the Government can decide to subvert the law because it was too ignorant/dumb/oblivious/stupid to realize what it was doing then what is to stop them from doing whatever they want to its citizens? Think about that. If the Government can pass a bill, sign a contract (in effect) and then back out after the fact, what can’t they do?

Now, Congress is trying to pass a special tax, which will tax the AIG bonuses by 90%. The actions of Obama and Congress show they have no respect for the Rule of Law. They are so worried that they will be held accountable for their actions they are trying to change the law to save their hides.

The Law is what protects us from each other and the Government. When people disregard the law, they start murdering, stealing and create bedlam. When Governments disregard the law it creates tyranny.

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10 Responses to “Private Property: RIP???”

  1. Hannah said

    Agreed. This is scary stuff.

    Sen. Christopher Dodd, chairman of the Senate Banking Committee, told CNN on Wednesday that he was partially responsible for adding the loophole after coming under pressure from the Treasury Department. At the time, he said, the changes “seemed like innocent modifications.” -cnn.com

  2. mattbenchener said

    You nailed it–everyone is so outraged by the bonuses that they are willing to sacrifice anything to take them back…even the rule of law. This is what happens when government tries to control the free market, private enterprise, and capitalism.

  3. dan said

    Adding a law is not changing the rule of law, it’s the legal way to rectify what was a stupid decision in the first place. It effectually negates the bonuses (which is legal) but doesn’t actually prevent their being paid (which would be illegal).

    I’m not an Obama fan, and I think the bailout was a travesty in general, but let’s not overstate his failings.

    I should also probably admit that I don’t believe in the lex rex theory of law. As a Christian, I more fully agree with a concept that could be phrased rex lex.

  4. Ender said

    Hi Dan, thanks for your comment. I’m glad to see someone willing to debate. Here are some of my objections, hope to hear a response from you.

    “It effectually negates the bonuses (which is legal) but doesn’t actually prevent their being paid (which would be illegal).”

    This is, in fact, wrong and lacks logical or constitutional backing, especially on two counts.

    First, laws just simply cannot be enacted retroactively or ex post facto. In 1827, the Supreme Court ruled on a case called Ogden v. Saunders. Here’s the outcome: “The states are forbidden to pass any bill of attainder or ex post facto law, by which a man shall be punished criminally or penally by loss of life of his liberty, property, or reputation for an act which, at the time of its commission, violated no existing law of the land.”

    Second, it also violates the equal protection grounds in the Constitution. You cannot treat certain individuals differently depending on what company they work for.

    Do you see the danger to these actions? How would you like it if the Government decided that it would pass a law to punish anyone working for your company who picked up their daughters or sons late after school? Not only that, but it would be applied retroactively. So the police come to your house, slap the cuffs on and off you go. Because, “Hey, it’s only trying to fix a stupid decision to allow parents to pick up their kids late.” Right?

    I am no expert on Lex Rex and Rex Lex, however, I find it shocking that as a Christian you would take the side that says the (Earthly) King gives you your rights. Rex Lex was and I guess still is a morally repugnant philosophy that encourages tyrants, fascists and any other totalitarian regime that mankind comes up with. Wasn’t Lex Rex based on Deuteronomy? I’m going to side with the Founders on this one, I get my rights from God.

  5. dan said

    Hey Ender,

    I appreciate your response. I don’t agree with it, but I appreciate it. It’s well-written and cites actual facts, a rarity in the blog world.

    BTW, is your screen name based on Orson Scott Card’s books?

    On to my disagreements: 🙂

    The case you have cited would indeed be compelling–if it were relevant. I am referring to a law which would tax 90% of bonuses not yet paid. It’s true that money has been authorized to pay bonuses in the variety of stimulus, omnibus and bailout bills that have been passed. What is not true is that most of this money has already been disbursed. I agree with you that money which has already been paid is not able to be taxed–that would be ex post facto. However, there’s nothing inherently wrong with adding a tax to income (i.e. bonuses) that is not yet paid. Just because money is earmarked to go to income does not mean that it has actually been paid. Anyone who’s ever managed a payroll (or, for that matter, a household budget) is aware of this, as I’m sure you are too. So yes, money that has already been paid in bonuses is gone forever–but for that which hasn’t been paid yet, I say tax away. I don’t particularly want to subsidize plutocratic failures.

    As to the unrelated argument about the Christian origins or Lex Rex vs. Rex Lex I think I’ll just let Scripture do the bulk of my arguing: 1 Peter 3 says, “Submit yourselves for the Lord’s to every authority instituted among men: whether to the king, as the supreme authority, or to governers who are sent by him to punish those who do wrong and to commend those who do right.” Romans 13 says, “Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God.” I don’t think it can get any more plain-spoken than that. Especially when you consider that Peter and Paul wrote this instructions in the context of emperors who persecuted Christians in legendarily heinous fashion. It sort of makes a tax-and-spend liberal (or in Obama’s case, spend-and-tax) quite tame by comparison.

    A final note. Jesus’ entire and complete teaching on taxes was this: pay them without complaint.

    I don’t necessarily like it either, as I veer libertarian, but that’s what He said.

  6. Ender said

    I admit to stealing the name from Card’s books. Do you read them?

    You didn’t address the equal protection grounds in the Constitution. Also, the problem with your reasoning is that you are thinking of this on a cash basis or accounting basis. The reason why that argument is invalid is that these bonuses fall under contract law. The contracts were established between AIG and the employees long ago. Like I have said in the post “War on Executive Pay”, Sure it stinks that AIG is required by law to pay these bonuses, but they and the Government must respect the law. The government could have let AIG fall into bankruptcy and all the contracts would have been voided, but they chose to bail them out prior to that, which obligates them and AIG to carry on as usual. If the government were to subvert the contract law in this fashion just because “the mob” wants it, where would that leave the rest of us?

    I have heard the arguments relating to 1 Peter 3 and Romans 13 before. I think the argument makes several logical jumps that I am not willing to cross. Maybe we can delve into this at another time. Didn’t Peter, Paul and even Jesus defy earthly authorities at times? To say that we should just blindly follow the governing authorities is not what those Scriptures mean. Should the Christians in Hitler’s Germany have joined in and persecuted the Jews? Should the Christians in modern China stop following Christ because the Government says so? Of course not.

    It is strange that you would say you veer libertarian and take that view of what Jesus said on taxes. Of course he said give to Caesar what is Caeser’s, but what exactly is Caeser’s?

  7. dan said

    I’ve read a few of Card’s books–mainly in the “Ender” world. I haven’t finished the series though.

    I’m not sure that I buy your coutner-argument about contract law. If I signed a contract and the government raised the effective tax rates that fiscal year, I would still be required to pay my taxes–even if the contract was signed before the tax increase. What would matter would be the date that I was paid, not the date that I signed the contract.
    Say the government were to declare that all of my mortgage payment (not just the interest) now counted against my tax burden. I would be happy, as my taxes would be lighter. I would not get a reimbursement for years past in which I had paid a higher rate (that would be ex post facto), but for any subsequent years the law would be in effect. Despite the fact that I signed my mortgage contract several years ago.

    The AIG bonus taxes are just the obverse of the above scenario. The only substantive difference is that we’re talking about a tax increase instead of a cut.

    As to the spiritual comments: Jesus said pretty clearly that money was Caesar’s when he asked the disciples whose picture was on the denarius and then said to render unto Casesar that which was Caesar’s. Do you interpret this differently? Jesus, Paul, Peter, and many others have indeed defied earthly authorities at times (when it conflicted with the revealed will of God). I don’t think it’s a logical leap to argue that Hitler’s genocide and China’s persecution of the church are against the revealed will of God. I won’t insult your intelligence by linking to the various Scriptural proof texts. Peter even articulates this when he defends the spread of the gospel saying, “We must obey God and not man” in Acts. Where I differ with you is that I don’t believe the conservative movement in America rises to this level of moral importance. Surely you’re not equivocating the kingdom of God with conservative political thought?!?

    The key to my seemingly paradoxical views is that I consider myself a Christian first, and only a libertarian insofar as it does not conflict with my (admittedly probably erroneous) understanding of Scripture. Much like the examples I have above.

  8. Ender said

    Well, I guess I’m going to go with the Supreme Court’s ruling on the ex post facto, however, even assuming your view point on this is true; how do you explain the equal protection grounds?

    Again, not to go into the Caesar thing at great length, Jesus doesn’t say exactly what is Caesar’s. I’m not sure what lead you to believe I was saying the kindom of God and the conservative political movement are equals, but that is not the message that I was trying to convey. Is that fair?

    What I was trying to email you about was to see if you would be willing to write a guest post or two to have a friendly debate on the Bible and how it relates to Politics or Economics. I think it would be cool and could spark some debate from others as well. Just email me if you’d like to pursue.

  9. dan said

    Hey Ender,

    Sorry it takes so long to reply; I don’t have internet at home.

    1. I’m not disagreeing with the ex post facto ruling (also, it would be irrelevant even if I did disagree–the law is the law). I’m arguing that it doesn’t apply. The wages have not been paid yet, thus the ruling is not ex post facto.

    2. This particular law does not technically violate the equal protection clause. It certainly violates the spirit of that clause, but technically the high tax rate is based on the source of the income (the omnibus tax bill) and not the recipients place of business (AIG, etc.). A fine distinction to be sure, but the difference between legal and not. Are you honestly upset about it? I’m kind of happy not to be paying “retention bonuses” for the “best and brightest” who got us in this mess. Okay, that comment is kind of unfair–most of the people who caused the mess have been fired, but even so, I would think that you would be happy to have some of the bailout money minimized…given the general political stance of this site.

    3. We’ll have to agree to disagree about what Jesus said about what is Caesar’s. When He says, “Look at this denarius, whose picture is on it?” and the people respond, “Caesar’s” and then He says, “Render therefore to Caesar what is Caesar’s…” that seems pretty straightforward to me. I agree with you that He doesn’t specifically deliniate what is Caesar’s and what is God’s in all circumstances, but on the issue of paying taxes (which was the context of the question–was it lawful to pay taxes to Caesar) He’s being pretty clear cut.

    4. The Bible and politics/economics idea sounds found, but I sincerely doubt I’d have the time to do a good job on it. I work about 60 hours a week, am in seminary and am pretty active in my church. Plus I have a wife and 11 month at home… Thanks for the invite though. I really do like your site.

    I doubt I’ll be able to comment as much though; last week was spring break (I work for the school I attend). My job will be considerably busier now until the summer.

  10. Ender said

    The reason I am upset about this is that I feel that:

    1. It is unconstitutional. I still disagree that it isn’t ex post facto. I also disagree with your argument that it doesn’t violate the equal protection clause. One thing that I think you would agree with is that the purpose of this tax is not to raise revenue, but is clearly intended to punish the recipients of the bonuses. This in itself is unconstitutional. I also, don’t like Congress subverting “the spirit” of the constitution, as you call it, in order to appease the mob. Which brings me to my next point…

    2. It is the result of a populist mob. The point is that all three branches should be restrained by the Constitution. We cannot allow aspects of it to be avoided because a bunch of people are angry. What happens when the mob becomes angry that schools or churches don’t pay taxes? Will Congress simply find a creative workaround to “tax” these institutions? There is a process in place to make changes to the Constitution, but they are difficult to do, and are that way for a reason. Changes should be made in Prudence.

    I have said over and over that the bonuses stink. The point is that I don’t want to set a precedent of creating a punitive tax on a narrowly defined group of people just because there are townsfolk with torches and pitchforks outside.

    The time to stop the bonuses was before they were signed into law. So, given the political stance of this site, we would have preferred that a. there be no bailout. b. if there is a bailout, it is not a rushed trillion dollar disaster. And c. follow the law not the populist mob.

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