Has Barney Frank Ever Actually Read The Constitution?

[Rage for Order]

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC&template

Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.

“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.

He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.

Mr. Geithner said he would consider “extending at least some of the TARP provisions and features of the $500,000 cap to U.S. companies generally.”


Can anyone point to the wording in the Constitution that gives our government the right to do this?

I'm all for limiting the pay of executives at banks that receive bailout funds until they are able to pay the loans back in full, without the use of shady accounting tricks. I'm also all for going after these same executives to return bonuses that were awarded based on earnings that were later restated, meaning they never actually existed. But again I ask, from where in the Constitution does Congress derive the power to determine the pay of executives, or any other employee, in private industry?



edit to bold the areas to which I was referring

[stillcool]

1. If the government is giving them the money...

they can set the terms, no?

[Rage for Order]

3. Yes they can, but please read the article more closely

They are saying "all US companies", which I take to mean those who take bailout funds, and those who don't. Am I misreading it?

[stillcool]

29. I read that "Some TARP Provisions"..

could be extended to all U.S. Companies..but I did not see any specifics cited. I suppose if the concern is about companies bankrupting themselves and pulling Enron's there might be some kind of legislation crafted to curb that. I don't know.

[marmar]

2. The government is the banks' creditor right now.....they can impose the terms.

n/t

[Rage for Order]

5. They're not referring only to banks...

They're now saying to US companies generally

[aquart]

4. Thank you for your concern.

[Rage for Order]

6. You're welcome

Somebody's got to worry about the Constitution, I guess it may as well be me :shrug:

[Tangerine LaBamba]

13. If you're going to worry about it,

you should be more familiar with it.

Check the Commerce Clause, and then, if you want to read a truly great story, read about how the Federal government got jurisdiction back in the early sixties over the places that wouldn't serve blacks down South.

Hint: the Commerce Clause.

A great story.

Oh, and apropros of your comment about "finding it in the Constitution," you might reconsider that narrow strategy, because you obviously forgot about the basis on which Roe v. Wade was decided.

[Rage for Order]

16. So you're saying that the Commerce Clause...

Is applied to the commerce of an employer giving an employee a paycheck? Seems like a pretty loose interpretation. And if that's the case, what's to stop Congress from setting the salary of every worker in the United States?

[Tangerine LaBamba]

30. No, that's not at all what I said

Your thinking betrays your lack of information on the subject.

As I said, go read up on the Commerce Clause. It's a very, very important part of our Constitution, and for people not in the law business, often overlooked. It's a brilliant piece of writing, and the application of it has changed our country in significant ways.

You really do need to learn about this, since that "paycheck" statement indicates you might not even understand the use of the word "commerce" as it is used in the Constitution.

You're in for a very wonderful story.

Here's a very good hint to start you on your way:

And, for the record, I used to teach Constitutional Law.

[Rage for Order]

38. Well then professor, what is your view?

Rather than giving me a reading assignment with the hope that it will give me insight into your opinion on the matter, why not just give me your opinion on the matter.

And, for the record, I didn't teach Constitutional Law, nor did I stay in a Holiday Inn Express last night.

[Tangerine LaBamba]

41. Well, I would if I could,

but you don't know enough yet to be able to understand what I'd tell you. I do not mean that to be offensive or condescending, but you're asking for something that's unrealistic because it takes about one-third of a semester to cover the Commerce Clause and its storied history in law school classes.

It's a long and complicated, but compelling story, and I recommend it highly. If you start with that photo I included in my last post, you've got a good start.

I never thought you taught Constitutional Law, believe me.

[Rage for Order]

45. LOL

Yes, far be it for you to be condescending. I am not completely unfamiliar with the Commerce Clause, so if you'd like to give your opinion I'm all ears. It's been my experience that those who are most knowledgeable in a given field are able to convey that knowledge to a wide variety of audiences without compromising the central themes of their ideas. Given this, I'm fairly certain that I would be able to grasp the basic premise of your opinion.

[Tangerine LaBamba]

47. You keep trying to simplify

It's a history lesson, and you have to understand the origin of the Commerce Clause, what it meant for so long, and then, how it was interpreted, and continues to be interpreted.

I would urge you to audit a Constitutional Law class at a law school, if there's one near you. Or see if there are any local colleges that offer courses in the Constitution. I wish every American would take such a course.

Good luck.

[jwirr]

46. This is not some new thing. When a health provider contracts with

the government to do services the wages are set by the government. This is no different. These banks accepted money and there are strings. I also read that it was not all banks or all companies but only those who were receiving money from the TARP.

[Tangerine LaBamba]

48. They're the people who got the money,

they're the debtors, and they can't do certain things - like cash in stock options - until the debt is repaid.

It's sort of like how your mortgage holder won't let you sell your house until you pay for it.

Not complicated, and eminently fair.

Why is this hard to understand? I love that President Obama has come up with this.

[Rage for Order]

51. But what of those companies that do not take bailout funds?

We have no argument with respect to those banks or businesses that accepted or do accept federal loans/capital infusions/bailouts etc.

[Tangerine LaBamba]

52. I didn't understand anything

to indicate that they were covered by these limits. I don't know what the misunderstanding is here, but a little common sense goes a long way, no?

[MilesColtrane]

63. They already set the minimum hourly wage.

Is that unConstitutional?

[The Velveteen Ocelot]

7. Art. I of the Constitution gives the Congress the power to "regulate commerce."

And this power has been interpreted very broadly.

[DJ13]

8. When the minimum wage withstood scrutiny by the USSC, a maximum wage

....would have to be deemed just as legal.

[Rage for Order]

10. Maybe

But shouldn't someone at least bring the case before the court?

[pinto]

9. Rep. Frank may be knowingly playing hyperbole in the debate,

looking for some measure of restrictions on any business that gets government funds (i.e. contracts), or something else. :shrug:

He's not clueless, so I assume there's a point he's making. And realizes that any bill that is clearly unconstitutional would be shot down as such.

[Rage for Order]

14. I'm with him on companies that get bailed out

Hey, if you come to Joe Taxpayer with hat in hand because you're broke, you can't take our money and pay yourself $20 million a year while your company loses $20 billion a year. However, for companies that haven't asked for or accepted any funds from the government I find this to be drastically overreaching.

[dflprincess]

11. Congress could amend the tax code so that any earned income

over $500,000 is 100% taxable. I'd be happy if the just made the crooks pay the FICA tax on it.

[wuushew]

12. Are you advocating Constitutional rights for corporations?

n/t

[Rage for Order]

15. I don't know, am I?

If I am it is inadvertent. A little guidance as to how I'm doing so would be helpful

[jobycom]

17. It's a tax deduction cap, not a salary cap.

"Treasury Secretary Timothy Geithner said last month that he might try to extend to all U.S. companies a restriction that prohibits bailout banks from taking a tax deduction of more than $500,000

[Uzybone]

18. Will it extend to Hollywood and sports?

I think its a bad bad idea. Frank is ludricous sometimes.

[Rage for Order]

21. And lawyers, doctors, dentists, political consultants...

The list goes on and on.

[jobycom]

24. If passed, yes, but I still don't think you've understood what the article says.

TARP is threatening to limit the amount a business can write off as a payroll expense to $500,000. They aren't threatening to limit salaries to $500,000.

There is discussion of limiting bonuses to chief officers of financial institutions who receive TARP funds to three times their executive salary, but as I read the article, that would neither limit the salary, nor apply to other businesses.

[Rage for Order]

19. Geithner's quote makes more sense

But Barney Frank's is downright silly

[jobycom]

26. I don't think you understood the article. Frank is saying the same thing as Geithner.

Frank and Geithner are talking about limiting the amount of money a corporation can deduct for executive salaries. They aren't talking about capping salaries, not even of the banks receiving TARP funds, as far as this article indicates.

[Rage for Order]

36. If what you are saying is the case...

Then that is sensible. Of course, if that's the case then I'm more pissed about the so-called "executive pay ceilings" of $500,000 we were sold. That means it actually costs taxpayers more money to pay executive salaries than it did prior to the caps, because now they can't deduct over $500,000 of that pay. And you know that if they are given the choice, the executives will have no qualms about increasing their company's overall tax bill to ensure that they don't take a cut in pay.

[jobycom]

56. It's not what I'm saying, it's what the article is saying.

:shrug:

[msongs]

20. the loanERof the money sets the terms, the borrower can accept or refuse- no constitutional

issues involved at all here.

Msongs

[Rage for Order]

22. Again, they're not limiting it to companies that are loaned money

Barney is now saying ALL companies

[skids]

42. Not so sure about that...

Rep. Frank may only be referring only to companies that receive TARP. It was first reported when Obama made the announcement that "The most restrictive limits would apply only to the largest firms that receive considerable government assistance. Healthy banks that receive smaller government infusions of capital would have more leeway." The exact details of what companies would be effected are in flux and vary depending on who you ask. What Barney thinks the score is, well you'd have to ask him (his office has generally been pretty responsive by email) and in the meantime you might ask him what he meant, rather than assuming.

[TheWraith]

23. Frankly, I wouldn't object. The constitution is for protecting people, not corporations.

This would be one more step towards doing away with the fiction of corporate personhood.

[marketcrazy1]

28. I see what you are getting at

think about it,, would bill gates have worked so hard to make Microsoft what it is today if he knew he would never be allowed to earn more than 500 thousand a year! would warren buffet have founded Berkshire Hathaway if he knew he would never be allowed to earn more than 500 thousand a year! would Thomas Edison have made 2000 attempts at the electric light bulb if he knew he would never be allowed to earn more than 500 thousand a year!.... this is idiotic if true.. want to KILL the American entrepreneur well this would do it.... this is getting STUPID!!

[wuushew]

35. For many high paid executives money is just an abstraction

many suffer from Type A workaholic personalities and never really enjoy the fruits of their alleged labor. Most of the spoils end up with the ex-wife.

Our European and Asian colleagues are able to achieve similar if not superior feats of industry given lesser compensation. Why is it wrong to identify potential waste in the utility of money?

[tkmorris]

39. No, it wouldn't

Warren Buffet's salary is... wait for it... $100,000.00 per annum. Bill Gates' is considerably more, but it didn't pass $500k until long after Microsoft dominated the market and Bill himself was so rich he could easily have not accepted any salary at all. They, and most other entrepreneurs who do get rich, do so by owning large amounts of stock in the corporations they create. For example in 2004 Gates' salary was well under a million dollars but he made $172 million in dividends from the stock he owns.

As for Edison, well, if he really wanted a practical incandescent light bulb all he had to do was bet Nikola Tesla that it wasn't possible. Tesla would have had one operating in a week, and it would probably still be burning :)

[TheWraith]

58. Nobody said that you'd be prevented from getting rich.

In all those cases, you're talking about people who would own original stock, or who would own patents, or otherwise made their fortunes in ways OTHER than getting a wildly inflated annual salary. CEOs are the opposite of those people, in that CEOs almost never do anything for their company that's worth the kind of money they drain off of it. And for every Steve Jobs there's a Carly Fiorina.

[Cleita]

25. We could nationalize them if we want and replace the executives, which

would be a smarter thing to do IMHO, so I don't see why we don't have the right to demand that Congress put a cap on executive salaries of companies that have to be bailed out with taxpayer's money.

[nickinSTL]

27. not really a new idea...

last I read, a maximum wage for executives was a platform of the Socialist Party. In that case, it is limited to (I seem to recall) 10 times the pay of the lowest paid employee of the company.

Have to say, I'm all for that.

I agree with the post in this thread saying that if a minimum wage is legal, then so would a maximum wage be. I'm personally SICK of corporate greed. Time to limit capitalism.

DAMN RIGHT I'm a Socialist. About time we had a Democratic Socialist system like most of Europe.

[Tangerine LaBamba]

32. My socialist grandfather

would have loved you. He raised me up on the writings and speeches of Eugene V. Debs and Anatole France. Even named one of his sons after Anatole France.

He'd like that I turned out to be an anarchist/lawyer/novelist, but, you and he would have done beautifully together.

:toast:

[GeorgeGist]

31. Where does it say they cannot?

[UTUSN]

33. Uh: Yes?!1 n/t

[corruptmewithpower]

34. "from where in the Constitution does Congress derive the power "

Congressman Ron Paul uses that line on his fello repubs often, and they hate it.

[Hugabear]

37. Ron Paul, is that you?

How have you survived on DU all this time?

Congress can make whatever laws it deems necessary when it comes to private businesses. Did you howl and scream when Congress established minimum wage laws? Or perhaps you think that the 40-hour work week is unconstitutional? Or one of the myriad other laws Congress has passed over the years to regulate private business.

[Rage for Order]

40. This is certainly not the case:

"Congress can make whatever laws it deems necessary when it comes to private businesses. "

Can Congress pass a law making it illegal for media publications to criticize Congress?

Interesting that you are amazed that someone who has regard for the Constitution has managed to "survive on DU all this time." The majority of the people at the DU I belong to supports the Constitution. :shrug:

[Solon]

54. No of course not, that would violate the 1st Amendment, but please show me...

where in the constitution are people granted rights to profit or to avoid regulation of their business from government.

[SergeyDovlatov]

55. Constitution puts limitation on the government, not on the people

and it was also clarified in the 9th and 10th amendmends.

For your convenience I pasted them here:

9. The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

10. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Though, of course, nobody really cares about constitution says. As long as you can creatively interpret 'interstate commerce clause' there are no practical limitations on what federal government can do.

[Nye Bevan]

43. That's an interesting question

and you have to be somewhat thick-skinned to raise this on DU, knowing that you would get a good few stupid and unoriginal "Thank you for your concern" type of responses.

I think that a maximum wage would be unconstitutional; *however* say Congress *really* wanted to cap *all* salaries at $500,000. Presumably they could raise the top rate of income tax to 99.9%, for any income over $500,000, and I don't see how that would be unconsitutional as Congress clearly has the power to set tax rates.

[Rage for Order]

49. Yes, they could do that

But talk about your law of unintended consequences. They wouldn't do it though - the largest donors to their campaigns are people who make over $500,000 a year.

[Hugabear]

50. Why?

Why would a "maximum wage" be unconstitutional while the minimum wage laws are okay? If you want to be literal, as long as you're not holding people in slavery, where does it say in the Constitution that Congress may set a minimum wage? If it's one of the inferred powers granted under the Commerce Clause, then why couldn't Congress then enact a "maximum wage" law?

Personally I've always been in favor of some sort of maximum wage. It's obscene when the heads of a corporation or any other business are rolling around in excess wealth while their workers can barely make ends meet on their paltry salaries.

[Nye Bevan]

57. It would be a "taking" which violates the fifth amendment

If seomone's market value is $1mm per year and the government caps his remuneration at $500k per year, then the government has effectively taken $500k per year from that person without paying compensation.

http://en.wikipedia.org/wiki/Taking

[Hugabear]

59. Oh come on, you can't really believe that

What do you call income taxes?

Fine. If you don't want to call it a "maximum wage", then just tax everything 100% over a certain amount. Same effect, except it means more money to help with much needed government programs.

[lumberjack_jeff]

44. "The piper calls the tune" or "you take the king's coin, you accept the kings rules" or

"If you want an allowance, you have to stop being a douchebag."

Uh, the government reserves the right to attach any strings to its largesse that it sees fit.

[SergeyDovlatov]

53. Wow.. Hold on. Or you can be categorized as domestic terrorist...

I saw some time ago an FBI flyer classifying domestic terrorist groups and one category was:

"3) Numerous references to the U.S. Constitution might also mark someone as a domestic terrorism suspect."

But talking seriously, with creative interpretation of interstate-commerce clause you can justify absolutely anything, including ban on partial birth abortion.

With courts permitting abuse of interstate commerce clause, constitutional limitation don't mean much.

[natrat]

60. please, these jokers wrote a bill literally giving away billions-this is more bs

[defendandprotect]

61. Price controls . . .

[LSK]

62. "Promote the General Welfare"

Having 1% hoarding all the Nation's money is not exactly promoting the general welfare.

PS Where is Social Security or Medicare in the Constitution?