GOPMOM ALERT!!! It’s communism, stupid
‘Oh, GOPMOM, you’re just trying to make him look bad. He’s not a communist. He just wants to make things fair. You’re just a sore loser. No one should make such a disgusting amount of money. $500,000 is more than enough to be paid to do anything. Those Wall Street guys are just greedy, they’re bank robbers. They don’t deserve it.’
Obama, along with Treasury Secretary Timothy Geithner, is set to cap pay for government-aided Wall Street executives at $500,000, according to a senior administration official, at the White House Wednesday.
Not enough for Barney Frank, though. He’s going after everyone.
“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.
He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.
H/T Michelle Malkin and Michael Graham
Well, look on the bright side. At least no more banks, corporations, airlines, car manufacturers, movie studios, TV networks, sport franchises, etc, etc, etc, will be asking for anymore bail-outs. That ought to save us a few billion. Now, I’m assuming all Soros’ businesses are in the black, right?
Allahpundit at HOTAIR is continuing the conversation.
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Firms surviving on government money should not be paying their executives as lavishly as they are used to. I don’t feel like that’s that controversial.
Also, I believe they’re allowing CEOs to be given stock options as compensation on top of the $500,000, so it’s not as if these guys are being tossed into the streets. Instead of being rewarded at their own discretion for poor performance, they’re being given a stake in their company’s recovery.
Oh, also, Barney Frank is crazy. The government can’t and won’t limit executive compensation for all US companies.
If they try that with all US companies, they will no be US companies for very long.
As for the companies that will be effected.
- There will be a brain drain, UAE will get the best
- Current executives will become consultants, possibly Canadian/Irish based
- A new financial incentive mechanism will be created to bypass the written regulation.
Wouldn’t that third point negate the first two?
We’ll see about the brain drain. I think a well-structured program that makes CEOs stand to gain significantly from turning their companies around may keep people there. Also, it’s not as if it’s easy to just go take another job right now – if you’re in the financial sector, for example, most of the companies that would want you either no longer exist or are also going to be on the government dole for a while.
3 would offset the first two but not negate them. There will be people who would leave. I strongly suspect the UAE (and others) have started to prepare generous offers this morning.
UAE still wants to be the worlds financial center, in order to achieve that goal they need the resources.
I guess it comes back to “How much $$$$ will it take to jump ship” – $$$$ has just become less for many on Wall Street. The rest of the world knows that and will be actively and aggressively hunting talent.
Further, Option 3 would created by the firms as an attempt to keep the talent in the US. The talent they are trying to retain have now seen that it is possible for an XO to negate any retention mechanism, no matter how creative.
So given the choice of:
- the new improved DooDad scheme that will give you your money with 3 levels of indirection, but maybe subject to negation by a future XO
- Quit and become a offshore consultant
- Quit and move to offshore firm
I think the DooDad becomes the least attractive. I have pointed this out before, if you impose punitive taxation or restrictions on earning potential, people will leave the US.
But ATG, Geithner also agreed that it would be a good idea to limit compensation/benefits across the board.
“Treasury Secretary Timothy Geithner said last month that he might try to extend to all U.S. companies a restriction that prohibits bailout banks from taking a tax deduction of more than $500,000 in pay for each executive.” from the Financial Times article
Surely you realize that by even saying it out loud, he should have been disqualified. Ridiculous? Crazy? The guy said it. This is fundamentally “un-American.” Limiting salaries – are we really that desperate to stop (illegal) immigration because the death of the American dream will do it. I don’t make $500K – I never will. I haven’t worked in ten years and I probably won’t for another four. I’ll be lucky if I make $500K in my lifetime. And I still get the chills when I read this.
Many out there feel the same way. On Michael Graham (talk radio here in Boston) yesterday a caller referred to the Gillette/P&G merger as criminal because the CEO that saved Gillette by structuring the sale got , I think, $50 million. Her reasoning is that 5000 people lost their jobs. No mention of the other tens of thousands whose jobs were saved. She refused to see that the CEO, in the end, by saving the company, was worth the money he was paid, according to the board, share holders, decision makers. He would not have made the money if he hadn’t been successful. If one person believes that, I’m sure many do.
The Obama campaign and the Liberals have continually drawn a line in the sand between the rich and the poor – they’ve just never clearly defined who is rich and who is poor. This is class warfare at it’s least classy. The Liberals in government live for this kind resentment. ANother great line on radio here in Boston from Jay Severin – the new definition of rich is someone making 20K more than me/ The Dems are capitalizing on this crisis to no end. I wouldn’t doubt for a moment they could ride this propaganda machine all the way into Wall Street boardrooms to demand salary caps, with the electorate following with pitch forks and scythes.
Now, I do agree (!) that if you take government money, you should follow the rules – no matter how bizarre. As I said, I hope this just encourages any companies looking for money to reconsider. The irony is that our social services provide all sorts of assistance to “people in need” and don’t place nearly as stringent limits on them. Maybe we’d have more money in the Treasury if we had stronger standards across the board. But you do realize, right, that any limits on freely operating corporations will be disastrous?
I don’t actually understand what that quote from the FT is saying, I read it 5 times and can’t figure it out sorry.
I don’t know the specifics of the Gillette case, but at its surface, $50 million seems like a lot of money to take as salary if your company was failing, even if you managed to save it from collapse at the last minute.
It all comes down to an idea that a Cabinet member has that he could dictate any policy to a free hold corporation. Unthinkable just 4 weeks ago.
Oh, and I’d link to it with the excerpt but then I’d have to pay them (FT).
Isn’t all market regulation dictation of policy to corporations?
Yes, it is and we don’t need it. If the free market economy were allowed to operate independently of the government, we’d all be better off financially. Let market forces drive it, not government’s idea of what the market should be doing direct it. I’ve consistently stated my opinion against regulation of markets.
I doubt that you are unequivocally against the regulation of markets. What about anti-trust laws? Safety regulations for food and medical products? I’m sure you can think of some regulations that are in the public’s interest.
But the regulations are there and we still get bum meds and bad food. Eaten any peanut butter lately? Plus, the corruption in the system – you think it would be greater? I disagree. Maybe 100 years ago but consumers are so much smarter now – lazier in many cases but better aware. If you let the consumer choose, you get winners and losers.
You sound like those whining moms who said it was all the US government’s fault there was lead on Chinese toys. It’s the Chinese toy manufacturer’s fault – and stop buying cheap toys from countries who would kill their workers just to bulk up their GDP. Hey, that would really put a dent in the lost manufacturing jobs #, wouldn’t it?
Many regulations were put in place to protect poor people – now the regulations benefit the stupid, ignorant and lazy. Those I can do without.
A perfect example is the current Madoff scandal – the SEC was warned/notified and they did nothing. Did regulations help there? Now, instead of the investors, who basically did not pay enough attention, suing Madoff for what he personally is worth, will go after the SEC (government) for compensation. So again, the tax payer takes it in the groin.
Life is risky no matter how involved the government gets. And the Feds are too big to keep watch on it all. How about some state regulations? Easier to keep an eye on. It’s gotten so that you can’t trust the stamp on your steak. And I certainly don’t believe all the USDA organic labels. If I don’t get it from the farm myself, God knows where it came from. And buying at the farm is no guarantee of organic or natural. The regulations are worthless to the American consumer – they simply feed the bureaucracy.
Sure, regulations aren’t perfect, but just because some people manage to slip through the cracks doesn’t mean we’d be better off without them. Existing regulations are the reasons we can catch, criminalize, and correct the problems like the ones you stated above. It’s not laziness that prevents people from going to farms to get all their own food, or start a lab in their basement to create all their own medicines, or buy some manufacturing equipment to create all their own toys… the whole point of the free market is a division of labor where we trust other parties to create products that we can then buy, sell, or trade. Regulations exist to foster trust between actors in a market that wouldn’t exist otherwise. The reason I have so much choice when I’m buying products is because I know that regulations make screwing me over as a consumer difficult and illegal.
Also, I think anti-trust laws are an even less controversial example of market regulation.
I never suggested we should all live subsistent lives – just be aware (and beware). I suggested the regulations do not help us. The criminal code already protects us – now, regulations just even the playing field amongst competitors, a major Liberal agenda item. The point I was making is that the regulations don’t guarantee anything. It is unlikely that you will get the jar of peanut butter that is contaminated, eat it and die. But your chances are just a good as anyone else’s, assuming you eat peanut butter. What’s the difference with any other regulated industry? Food gets contaminated even when everything is “regulated”. Investment bankers sometimes cheat people. Products are created improperly or carelessly and people get hurt. Everyone’s chances are pretty equal that at some point you might get a bum product. The repercussions of producing a bad product, whatever it may be, keep most manufacturers honest and trustworthy everyday – not the regulations.
I must say, it’s a bit of a comment on your character that you need a regulation to tell you how to conduct yourself, otherwise you might cut corners and cause injury and harm. I’m not saying you, ATG, are like this directly, I’m just saying you’re the one who brought it up. It would never occur to me to conduct my business this way – not only is it immoral and unethical, it’s a poor business model. One could go out of business rather rapidly.