Like everyone I’ve been following the AIG brouhaha, though with more than a bit of skepticism at the howls of outrage from the political class. (I have some more extended thoughts in this week’s issue, which should be up soon). Now that it seems that voiding the contracts is too difficult legally, congress is proposing to tax the bonuses at 90%Q. I kind of like the politics of this, if only because it will force the GOP to put their money where their mouths are: if they’re as outraged as they say, they’ll have no problem ignoring Grover Norquist and Rush Limbaugh and voting for the tax.
But Dean Baker also floats what might be a simpler, cleaner solution: just make what’s left of the AIG equity-holders pay for it.