WSJ’s Moore Explains Punitive 90-Percent Bonus Tax Proposal was Diversion Tactic to Protect Dodd, Frank

Remember back in March when Congress had the brilliant idea to retroactively tax bonuses paid out by bailed out insurer American International Group (AIG)? The House voted 328 to 93 for the 90-percent tax on the $165 million in bonuses, but it later died in the Senate.

Steve Moore, a member of The Wall Street Journal's editorial board, explained on CNBC's May 13 "Street Signs" that the punitive retroactive tax was just a distraction to divert attention away from the culpability of Sen. Chris Dodd, D-Conn., and Rep. Barney Frank, D-Mass., for the current financial crisis.

"Remember, Barney Frank was one of the guys right at the center of the financial crisis," Moore said. "I think he had a lot of the blame of this lays at his foot. He said roll the dice on Fanny and Freddie. So the point is I think that these Democrats are trying to redirect the populist storm against members of Congress like Chris Dodd and Barney Frank towards executives. So, I'm not so sure he didn't want that to pass as a way of deflecting criticism."

"Street Signs" host Erin Burnett told Moore that was "a pretty incredible statement," but conceded Moore had a good point when he pointed out Barney Frank's ties to Fannie Mae and Freddie Mac.

"I mean, look at the record," Moore said. "He was coming under a lot of heat for his involvement in giving a blank check to Fannie and Freddie, which now have required $400 billion of taxpayer bailout money."