On Thursday, in a fit of legislative rage, the US House of Representatives passed a bill that was scarcely longer than a spray-painted slogan, and about as well thought out. It voted to tax at 90 per cent big bonuses paid to executives of companies that get money from the troubled asset relief programme. “Retention payments” – bonuses – worth $165m had been paid by the financial products division of AIG Seven employees were scheduled to get more than $4m apiece. Since the financial products in question include the credit default swaps that precipitated the global financial meltdown, and since AIG would have been bankrupt had it not received $173bn of government funds over the past year, the public insisted that AIG be not just stopped but punished.

There were good arguments against legislating vindictively. First, in just six months, AIG’s employees have unwound a thousand billion dollars’ worth of its riskiest positions, and AIG cannot afford to lose their expertise. Second, a deal is a deal, and the bonus contracts were signed before the start of the bail-out. Third, this is a scattershot remedy. By hitting employees of all major Tarp beneficiaries, it will reduce the competitiveness of the whole US financial sector. These arguments have been ineffectual because the public’s gripe is not with the arguments but with the principles behind them.