Monday, December 01, 2008

Why is the Bailout Unconstitutional?

The Paulson Bailout fiasco is unconstitutional not merely because there is nowhere listed in the Constitutional a Federal authority to bail out commercial enterprises.

The Bailout is an ex post facto bill of attainder, both of which are of course forbidden by the Constitution.

An Ex Post Facto law is one which is written after the fact to address some problem.

A Bill of Attainder is trial by legislation.

And that is what we have in the Paulson Bailout.

-------- Update --------
I ran this past a lawyer friend, who said that actually, Congress can and does single out individuals for special benefit all the time. It can even name them, but the reason it doesn't usually do so is political, rather than legal.

It seems illogical, to me, because how does one draw the line between a punishment and a benefit? If Congress singles out Acme, Inc. for special benefits coupled with special labor rules, for instance, that may be on balance a positive or a negative thing for Acme. It seems to me that there is a spectrum or range from outlawing a company's existence to giving them too-big-to-fail money.

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Anonymous said...

It seems Bills of Obtainder are mostly what the Congress passes. But it's ok because it's "taxation with representation." We get punished in the wallet in the name of democracy. Don't you just love it, Loren? ~Jimmy

Loren Heal said...

Nice pun.

See the update.

Anonymous said...

Indeed, Loren. For better or worse, such measures only serve to politicize wealth and the money that represents it. And not only wealth - but production itself.

I find it not coincidental that the Federal Government's efforts lately have been to uphold... failure.

How long before even the American people who elected Obama see our government as the embodiment of FAIL? I'm thinking about a year or two. ~Jimmy

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