Reverse payday

By Megan McArdle

I'm still gathering my thoughts on bailout and regulatory solutions, hopefully for an omnibus post tomorrow morning.  Here's a question:  a lot of Democrats seem to want the Wall Street executives to disgorge things like their retirement packages and bonuses before cutting any deal.  Can Congress do this, legally?  I mean, yes, they make the law.  But my understanding is that while you can grandfather in benefits, you can't retroactively punish people for behavior that was legal when committed.  Can Congress reach in and retroactively void a private contract?  I'm not asking for commentary on the wisdom or morality of such a move, just whether it would withstand a court challenge.

This article available online at:

http://www.theatlantic.com/business/archive/2008/09/reverse-payday/4161/