Edmund Andrews and Vikas Bajaj write for the New York Times that
The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money. … Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends.
The CEOs of the financial industry brought this on themselves because they proved they can’t be trusted with money. We saw from the first wave of no-strings-or-oversight-attached bailouts from the Bush Administration that they can’t be trusted with money. You might as well give the bailout money to crack addicts.
Although CEOs cannot directly write their own checks, as I understand it their compensation is determined by the Board of Directors, an insulated group of people living in the same bubble of privilege as the executives. Apparently, boards of directors of financial institutions cannot be trusted with money, either.
Those who are still insulated are whining that a $500,000 cap is “draconian.” Steve Benen writes,
What a fascinating perspective. There are a series of companies that have been managed poorly and are on the verge of collapse. They’re going to the federal government, hat in hand, hoping to get tax dollars to keep them afloat. As James F. Reda sees it, a $500,000 salary is “draconian,” and might lead frustrated executives — accustomed to exorbitant salaries disconnected to job performance — to leave the companies they helped drive into the ground. Companies that would no longer exist were it not for government intervention.
And this is a problem, because … ?
I agree with Steve that there must be some sharp people in the ranks of financial industry management who would be happy to take $500,000 a year. As for those executives who would be insulted and quit — good luck finding work elsewhere, bub.
The bad news is that it seems the stimulus bill is falling short of votes in the Senate. See the Talking Dog for background.
Gary Kamiya reminds us what’s at stake:
We are in a dreadful economic crisis, the worst in the lifetime of anyone who is under 70 years old. Forget the abstract statistic that millions of people are out of work and try to grasp this staggering reality: Twenty thousand jobs a day are being lost. Millions of people have lost their homes and their life savings. Countless millions have no health insurance. Businesses are failing at a staggering rate. Desperate states are shutting down services.
This is not a drill. These are real things that are happening to real people, people we all know. Everyone, whether they’re poor, working-class or middle-class, has either suffered themselves from the economic collapse or knows someone who has.
Try explaining that to the Senate. Thanks.
The Senate seems incapable of understanding the reality of life in 2009 any more than those CEOs who want us to loan them money to keep their businesses afloat with no strings attached. It seems some Dems are not supporting the stimulus for crazy reasons as far as I can tell. They need to get a job in Wal-Mart.
(From AP via Yahoo)“…compensation experts in the private sector have warned that such an intrusion into the internal decisions of financial institutions could discourage participation in the rescue program and slow down the financial sector’s recovery. They also argue that it could set a precedent for government regulation that undermines performance-based pay.”
Greed trumps IQ
Obama needs to take to the airwaves and explain the items that must stay in the stimulus bill. He needs to direct his remarks to the people who elected him, and explain why we need to convince our senators to pass the bill. At the same time, he can talk about responses from the finanicial sector to his proposed pay cap, and calmly and eruditely knock such idiocies out of the park.
He needs to do this by pre-empting the first half hour of CSI or The Bachelor or whatever, with very little warning, to make sure we pay attention. Perhaps some of the Muppets could be induced to assist in illustrating the president’s points. Frank Oz is a pretty rockin’ Muppet-American; I’m sure he’d help a guy out in a pinch.
It’s not our fault, of course. Eight years of “D-d-duuuhhhh…” has really reduced our collective attention span. With patience and help, we can get it back.
Ooooh! Ooooh!! I’ll take the job for less than $500,000.
My qualification? I was right about the meltdown years ago. I even wrote about it here on maha’s site.
I have a BA in Communications and somehow, with no MBA, I was able to see the shitstorm coming. How? I read the paper’s and cruised economic blogs, while the tycoon’s were busy counting their own money.
So go ahead, you clowns making 30X to 350X what the average American makes, quit your job. I’m unemployed right now and will take any job I’m phyically capable of doing. Maybe you can buy me a cup of coffee while we wait at a “Career Day'” event that has a half-dozen jobs that pay $8 to $10 an hour (part-time, no bennie’s) – and a thousand people in line. Hell, if I see one of you in line, I’ll %@#&ing MAKE you buy me cup of coffee! I’m a pretty big boy, and still strong at age 50. And if you don’t buy me a cup, I’ll just assume you’ve kept up on your COBRA benefit’s before I put you in the hospital- you know, COBRA, the benefit’s I can’t afford…
And to think, my whole life I’ve been non-violent.
Don’t start the Revolution without me!!!!!!!!!!!!!
Having lost my job in November (with no hope in site) I would gladly take a job where if I f*#k it up so bad that it puts a whole country into a recession I would not get fired, but they would still pay me half of a million dollars a year to keep doing whatever it is that I have been doing.
Where do i sign up for that…???
Ok, I give up. Why is this post filed under Condi Rice?
Swami — Gremlins.
What upsets me about the Senate is that the Dems will not force the Repubs to filibuster. As long as the Dems have 51 votes, bring the bill forward for a vote. if the Repubs want to talk it to death, let them. They are only going to shoot themselves in the foot.
Well, I now have to somehow find the time to write a bitchslap email to my new senator, Mike Johanns. What an idiot: “The stimulus bill goes against Nebraska values.” How so? All Nebraskans are shortsighted, obstreperous crybabies? (If I actually used that language with Johanns, I’d get this response: “I’ll pass your note along to my wife, Stephanie, to forward to her OB/GYN for a reply.”)
The guy’s held Chuck Hagel’s senate seat for barely a month, and already I don’t know which to do first– cry, scream or puke.
This will enrage some. It will strike fear in the hearts of many. Other’s heads will spin around 360 degrees like Linda Blair’s in the exorcist. Who said politics can’t be entertaining? Watching the GOP spin this one should be breathtaking.
These are the first few chips at busting up a good old boys network. These people think they are invulnerable. Well, they can always threaten to go somewhere else or they could just be put out to pasture…some retirement home for execs who drove their companies into the ground. Or they could file for unemployment just like everyone else.
Many have complained about an ignorant electorate that doesn’t pay attention. Maybe there’s a silver lining in that.
The GOP should have been a lot more careful playing with that red hot poker, “resentment politics.” Did they think it would never be turned on them? They could put their eye out with such a thing.
There are so many things like this Obama can do but it seems like he is 10′ tall and those in Congress are like little little piggies still intimidated by the big bad GOP wolf.
So interesting…
site problem? submitted posts not showing. Was I put in naughty box without notice? I cannot recall any recent sins.
Pat — Askimet thought you were spam. I don’t know why.
Pat, Maha doesn’t have a naughty box…she has a twit filter. And you made it through. Keep up the good work.
Chief (#8): I absolutely agree. The Dems should make the Repugs stand up and state what they don’t like by fillibustering, then point the finger at them in the press as the guys who don’t want to give you, the American public, a bailout. If you roll over they get off the hook by saying it was never brought to a vote. Make them kill it. Make them take an open, obstructionist stand. Then flog them over it. It will move public opinion in the right direction and could (maybe?) make them change.
Tonight I met with several friends, most of them educators, to share and discuss one another’s writing projects. One of the pieces talked about internal rhetoric; that is, the things we tell ourselves in order to define ourselves and our world.
Inevitably, the discussion turned to current events. One teacher mentioned an NPR report she’d heard this afternoon, about how executives with capped salaries would just move to companies not taking bailout money, companies that can continue paying whatever the traffic will bear. “Now, I usually think of myself as pretty socialist in my beliefs,” this teacher said, “but capping salaries? That sounds pretty socialist to me!”
I got a little miffed at someone who should know better, throwing around the “socialism” label so loosely and inaccurately, and pointed out that the government needs to be sure the bailout money is spent as intended. I added that awarding bonuses to people who failed at their job is bad business. Ah, but never mind common sense. “Maybe not,” replied the teacher, “but that’s the way it is. We live in a capitalist country!”
That was her internal rhetoric. Mine immediately became: ARRRGH! This from a teacher!
If she knows her Civics, she knows we live in a democracy, and nothing in our founding documents establishes or defines our economic system. If she knows her American History, she knows that modified “socialism” has been applied before to address specific needs (the Depression; war rationing), so as to get the country back on its feet to resume its freewheeling, Yankee-trader ways. If she knows anything at all about business concepts, she knows that an investor-required salary cap is not in any way, shape or form, “socialism.”
I came home from a dismaying lesson in internal rhetoric, having learned that even reasonably intelligent and well-educated people, people who listen to NPR for petesake, are creating their own “understanding” these days, in defiance of fact, history, and common sense. I don’t remember hearing such outlandish nonsense even after 9/11. ARRRGH.
Askimet thought you were spam.
Random thought: if I were like Desmond Hume on Lost, and my 1980 consciousness suddenly popped into my body here and now, what on earth would I make of that sentence?
I wonder what the weather is like in the alternate reality where a salary capped at 10 times mine is somehow seen as draconian. Is it always sunny there? Do gumdrops grow on trees there, and lemonade flow in streams? Do pixies play pretty tunes on magic flutes?
I had thought I would never know, but at the rate the Congressional GOP is bending reality in opposition to the stimulus bill, it may be only a matter of time before space-time implodes entirely. Well, I guess it would mean I could stop worrying about global warming.
Just looking at the comments as a whole I must remind us all that even President Obama warned us that change wasn’t going to happen simply by his election and a magical kumbaya song. The interests of the Republican party have become powerful in the last 30 years and its going to take some time to change the deep problems America faces. Be patient my friends.
#17 I would love to find out what it’s like too. I have been thinking about it though and if I made a million and got another million in bonuses each year my expenses would be more than $500,000. a year. I am guessing we will see some good deals on yachts in the near future or a few people will give themselves a nice parting package and move to another company. I hope they added limits to parting packages!
#8 I am sure all we would hear is that it cost too much and that it doesn’t give enough tax breaks to the poor wealthy people. Toss in a few that is adding pork and this is un-Americans.. and you have it.
As for the voters, some would be glad someone was thinking of not spending.. and others would see it as repugs standing in the way of recovery.