Armed Polite Society
Main Forums => Politics => Topic started by: HankB on February 04, 2009, 02:31:43 PM
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. . . Obama announced that executives of finance firms taking government bailouts would have their annual salaries limited to 500,000 dollars, . . . Douglas McIntyre at the financial website 24/7 Wall Street said the limits could make it more difficult for troubled banks to retain their best executives. (If the execs are so good, why are the banks "troubled?")
"Wall Street may keep most of its bankers if they face pay cuts, but it is the top five or 10 percent who make these companies really profitable, and they will soon be on their way to greener pastures if this measure is enacted," McIntyre said.
Excuse me, but if the guys facing pay cuts make the companies really profitable . . . THEN WHY IN THE BLINKING BLUE BLAZES DO THEY NEED MY TAX DOLLARS FOR A BAILOUT?!?! There are quite a few banks and such that are NOT in financial trouble, so that tells me that gross MIS-management (along with meddling by .gov) is the cause of a lot of the problems.
I've no problem with paying execs who've done a GOOD job plenty of money, but, almost by definition, the clowns running firms that need a bailout have NOT done good jobs. And I'd rather not see taxpayer dollars going to pay for resort junkets, Gulfstreams, and multi-million dollar compensation packages for execs who've failed to perform.
So I guess I actually agree - in principle - with this Obama plan, so long as it remains narrowly focused on institutions receiving bailout money, and with the pay cap ending once the bailout money is paid back. With interest.
http://www.breitbart.com/article.php?id=CNG.971ca461247820662877d6aaecf06087.361&show_article=1
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I would agree with this plan as well. I would prefer that they simply fire the current executives, and promote up the next level. But that is not likely to happen, so a cap seems reasonable if they are going to take government hand outs.
This does illustrate the danger of taking money from the federal government.
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bad at it or not, I want the government no where NEAR wages for anyone but their own employees.
That is one slippery slope I want absolutely no part of. Unfortunately, it will likely go with the territory of propping up failing banks rather then letting them fail and other, better run, companies step in to fill the void. That's the real fault in this IMO. Demand doesn't simply vanish because a business goes under, where there is demand it will be met.
And should be met by those who can efficiently do so, not those propped up.
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I don't agree with government meddling in private businesses or with bailouts in any form.
I do think that most executives are grossly overpaid. They're usually no more competent/skilled than a lot of mid-level managers. The only reason most of them got to where they are is that they're very good at corporate politics or, in a lot of cases, lucky.
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bad at it or not, I want the government no where NEAR wages for anyone but their own employees.
I agree with you. But, remember taking federal money is voluntary on the part of the failing banks. There is an easy way for companies not to have to have their executive wages limited: Don't take government money.
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and banks that were doing fine and pressured by the government into taking bailout money?
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If they took the money, they need to have the cap. A lot of banks did not take any money.
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so the answer to one bad policy is to further it with another even slipperier slope?
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I'm fine with this. If companies are successful, they can make as much money as they want for their execs.
If they are FAILING, and want MY MONEY, they get limits! I am not going to help reward failure with my money!
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I agree.
However, my problem is the slippery slope this opens up.
Today "We gave you money, top pay is XXX,XXX"
In a few months it's "We don't think you are doing so hot. In order to help ensure you don't get into trouble we are capping your salary at XXX,XXX" to banks they gave no money to.
The answer to one asinine move and regulations is not further regulations that open up slippery slopes.
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Why stop at executive salary decisions? Why not let FedGov make ALL of the decisions on how corporations are run?
Heck, let's just do away with corporations entirely. We'll let Nancy Pelosi and Harry Reid run all business enterprises.
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Why stop at executive salary decisions? Why not let FedGov make ALL of the decisions on how corporations are run?
Heck, let's just do away with corporations entirely. We'll let Nancy Pelosi and Harry Reid run all business enterprises.
Yeah, then we'll lose $500 trillion in GDP per month.
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So, if there are any actually talented executives in those companies, why should they stay there? Why wouldn't they move to companies that are not influenced by this bill?
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Would talented executives have put the companies they run billions of dollars in the hole?
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Would talented executives have put the companies they run billions of dollars in the hole?
That's entirely possible.
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I wonder if he will do the same when they send federal dollars down to the Universities.
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and banks that were doing fine and pressured by the government into taking bailout money?
If you have evidence of a financially sound bank being pressured into taking bailout money, I'd like to see it.
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http://philanthropyjournal.blogspot.com/2008/10/despite-joining-bailout-bb-says-it.html
<snip>Allison reportedly struggled over the decision, trying to reconcile his belief in free-enterprise principles with his sense of obligation to support the government’s financial recovery plan.
Denham declines to comment on details of Allison’s decision-making process but says BB&T was concerned the bailout would give ailing banks an unfair advantage over healthy banks like BB&T that have avoided financial trouble by refusing to make loans to unqualified borrowers.
“We have an obligation to remain in business and maintain our competitive advantage, and from a business perspective, it simply makes sense to take advantage of the same low-cost capital costs as our other competitors,” Denham says.
Banking industry insiders say the U.S. Treasury Department pressured healthy banks to participate in the bailout plan and has the power to punish banks that do not participate.
Denham says the bailout plan actually hurts healthy banks like BB&T by, for example, increasing the premiums it pays the Federal Deposit Insurance Corporation to protect depositors, and increasing the costs it likely will pay the Federal Reserve Bank for overnight borrowing.
“Now we are being punished by the bailout plan for having followed our values, and everyone else is being let off the hook,” he says. “The bailout plan is for the banks and investment banks that were poorly managed.”
BB&T has been able to weather the credit crisis through years of putting into practice the moral values Rand spelled out in her novel Atlas Shrugged, Denham says.
<snip>
Paulson and Bernake put the arm on lots of banks for the simple reason the public can not get the idea that only certain banks were irresponsible in lending practices and others such as BB&T were not. Might cause a flow of deposits and other business from the big and irresponsible banks to the small and responsible banks. Can't allow competition based on substance in banking.
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bad at it or not, I want the government no where NEAR wages for anyone but their own employees.
That is one slippery slope I want absolutely no part of. Unfortunately, it will likely go with the territory of propping up failing banks rather then letting them fail and other, better run, companies step in to fill the void. That's the real fault in this IMO. Demand doesn't simply vanish because a business goes under, where there is demand it will be met.
And should be met by those who can efficiently do so, not those propped up.
While I agree, if the banks don't like it, there's a simple solution: don't take bailout money.
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Waitone, did BB&T take bailout money? It looks like they signed up for but has it been received yet?
I don't think it is fair to cap the exec salaries after the fact. If the money was originally promised no strings attached, then I think the govt should honor that, and not add conditions to the deal after it is done.
In priniciple though I think it is totally reasonable to cap salaries if a business is taking tax payer money. But the business needs to know that up front.
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Would talented executives have put the companies they run billions of dollars in the hole?
If a company doesn't have talented executives, how do you expect it to get out of the hole?
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This is just the beginning, folks. Obama will eventually go farther than this, capping executive salaries in other industries not receiving federal bailout monies. A slippery slope, indeed.
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This is just the beginning, folks. Obama will eventually go farther than this, capping executive salaries in other industries not receiving federal bailout monies.
Now how would he do that???
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Now how would he do that???
In the same way the government regulates practically every aspect of the economy?
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Specifically what laws and powers would he call on to limit pay? I would ask for specifics, not vaguaries.
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What specific power do you think he needs? Or, rather, what makes you think he'll call upon some pre-existing power to do whatever he wants to business?
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Specifically what laws and powers would he call on to limit pay? I would ask for specifics, not vaguaries.
He would use his political pull to support bills to that effect?
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So you agree it would take new legislation from Congress, and this legislation would have to fall within the powers allowed to Congress as set forth by the Constitution. Do you really believe there are votes in the Congress to do that? And even if so, do you think it would be Constitutional?
I think folks are now straying towards insanity if they believe Obama could accomplish this, or that he even wants to accomplish this.
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And even if so, do you think it would be Constitutional?
This is by an large irrelevant, as the Congressional powers have been interpreted very broadly by the courts. THe courts ruled, for example, that if you grow corn and feed it to your own animals, this falls under the power of Congress to regulate under interstate commerce. The courts ruled that Congress can regulate the length of your shotgun.
Remember that there was a time in very recent history that the wealthier Americans were fined up to 99% of their income. Do you think it can't happen again?
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Educate me this:
Remember that there was a time in very recent history that the wealthier Americans were fined up to 99% of their income.
The percentage may be wrong but the egregiousness has not worn off. From a naive newbie, teach me.
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THe courts ruled, for example, that if you grow corn and feed it to your own animals, this falls under the power of Congress to regulate under interstate commerce.
What law are you referring to in that example?
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It was called the Agricultural Adjustment Act.
The ruling is referred to as Wickard v. Filburn. (http://en.wikipedia.org/wiki/Wickard_v._Filburn)
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So you agree it would take new legislation from Congress, and this legislation would have to fall within the powers allowed to Congress as set forth by the Constitution. Do you really believe there are votes in the Congress to do that? And even if so, do you think it would be Constitutional?
There have been rumblings on and off for years from the Left that executive pay should be limited in some fashion. Obama has taken the first step.
Looking at our current Congressional makeup and who we have in the White House, it's not much of a stretch (and certainly not insane) to wonder when broader limitations will be advanced.
According to many on the Left, we have a "living" Constitution. What would be so difficult?
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What would be so difficult?
Getting it past he Supreme Court. Conservatives hold a majority there now.
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It was called the Agricultural Adjustment Act.
The ruling is referred to as Wickard v. Filburn.
Thanks for the info. That is a pretty scary decision. After reading that, it sounds like the federal government can do anything it wants to under the disguise of interstate commerce. My question would be whether or not the current court would tend to agree.
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I don't think it is fair to cap the exec salaries after the fact. If the money was originally promised no strings attached, then I think the govt should honor that, and not add conditions to the deal after it is done.
In priniciple though I think it is totally reasonable to cap salaries if a business is taking tax payer money. But the business needs to know that up front.
A newspaper story today stated that BHO's rule would not affect companies that had already received bailout money, but would apply to companies that accept it in the future. (The article also said there were ways to weasel around the rule. =( )
Personally, I think a thorough housecleaning - CEO, CFO, & Board - would be a good start if a company receives a billion or more in bailout funds. And no company receiving bailout funds ought to be able to fill those positions with execs who'd lost their jobs because they mismanaged another company that needed bailout money.
If a company does NOT get bailout money . . . the .gov ought to keep it's nose out of things like compensation.
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If this rule would only apply to new bailout money, then I think I am in favor of it. It is not unreasonable for the government to regulate a company if the company voluntarily receives tax payer money. The government needs to make sure that our money is spent and managed appropriately.
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bad at it or not, I want the government no where NEAR wages for anyone but their own employees.
If you take the King's shilling, you are the King's man.
As I recall, the govt going around forcing banks to take the money. They knew, or damn well should have, that money isn't exactly free and that there would be a price to be paid. I fail to see why any exec in such a situation could bitch. Through their general incompotence, they demanded and got money directly out of my paycheck. I fail to see why taxpayer dollars should be used for salaries or bonuses for the upper echelon of those fools.
But yes, if a bank or any other company did not take a dime of fed money, the fed.gov should not have any say in wage caps.
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With this new policy, I can almost guarentee that many of these institutions that are coming to the feds with hat in hand, will all of a sudden say that they are not that bad off and decline any bailouts-
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With this new policy, I can almost guarentee that many of these institutions that are coming to the feds with hat in hand, will all of a sudden say that they are not that bad off and decline any bailouts-
Goldman Sachs (http://uk.reuters.com/article/bondsNews/idUKN0428223120090204) is already.
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This is just the beginning, folks. Obama will eventually go farther than this, capping executive salaries in other industries not receiving federal bailout monies. A slippery slope, indeed.
(https://armedpolitesociety.com/proxy.php?request=http%3A%2F%2Fcr4.globalspec.com%2FPostImages%2F200709%2FTinFoil_DB52B2F1-0E7F-A983-F0F9D799A20B06C8.jpg&hash=396d71b701476438f77526039d4ae59762b160f2)
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Goldman Sachs (http://uk.reuters.com/article/bondsNews/idUKN0428223120090204) is already.
Wow, amazing how sucking at the government teat looks less ideal once it begins to hurt, huh?
EDIT: check this out. The caps are Male Bovine Excrement:
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=azVLk.22AkLI
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So you agree it would take new legislation from Congress, and this legislation would have to fall within the powers allowed to Congress as set forth by the Constitution. Do you really believe there are votes in the Congress to do that? And even if so, do you think it would be Constitutional?
I think folks are now straying towards insanity if they believe Obama could accomplish this, or that he even wants to accomplish this.
Don't make the mistake of thinking that Obama would need an actual authority or power granted to him. There's no reason he couldn't or wouldn't just go ahead and do it anyway.
And even if you conclude that he does need to be given some sort of authority, what makes you think the liberal Democrats controlling congress wouldn't pass a law granting it?
They already impose minimum salary requirements. Why is it so hard to fathom that they'd try to impose maximum salary requirements?
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My point is Obama could not simply and easily decree salary caps. It would take legislation, and almost certainly a test in the Supreme Court. I highly doubt corporate America would idly sit by and let that happen.
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You forget, the left believes it rules, not that it serves.
When was the last time a politician paid attention to the constitution again?
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When was the last time a politician paid attention to the constitution again?
Well, the Heller case perhaps? Obama is now on record saying he agrees with the Heller decision that the 2nd Amendment is an individual right.
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My question would be whether or not the current court would tend to agree.
Have you asked a glancing goose? =D
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Well, the Heller case perhaps? Obama is now on record saying he agrees with the Heller decision that the 2nd Amendment is an individual right.
He's also on record saying he thought DC's gun laws were not infringements :rolleyes:
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Just a tad insulting, Nitrogen. Thank you very much.
If one thinks about it, Obama and crew capping executive salaries in general is not that far fetched. The left has been making those very noises for years, decrying the amounts some people make in salary, bonuses, and stock options.
Many in Congress would love the idea of capping salaries.
As far as the Supreme Court ruling the idea unconstitutional (should a challenge ever make it that far), remember Kelo?
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What advantage would there be for the government to cap private salaries involving companies not being subsidized by the government? All it would accomplish is reducing the amount of income tax revenue those salaries would produce for the federal govt.
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What advantage would there be for the government to cap private salaries involving companies not being subsidized by the government? All it would accomplish is reducing the amount of income tax revenue those salaries would produce for the federal govt.
Since when do politicians make decisions based on logic? How often does common sense enter into the typical politician's thought process?
To many on the left, it is all about "fairness". Logic and reason have nothing to do with anything.
IMNSHO, the word "fair" should only be used when describing fly balls and the weather.
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Just a tad insulting, Nitrogen. Thank you very much.
If one thinks about it, Obama and crew capping executive salaries in general is not that far fetched. The left has been making those very noises for years, decrying the amounts some people make in salary, bonuses, and stock options.
Many in Congress would love the idea of capping salaries.
As far as the Supreme Court ruling the idea unconstitutional (should a challenge ever make it that far), remember Kelo?
To be blunt, I do think the idea is stupid. Didn't mean it to be personal though.
Not out of any ideological problem that any politician might have with the idea mind you, but remember, BOTH parties are supported by very wealthy individuals and companies. The Democrats would not want to do anything to piss off the TLA, Pederson Group, and their other corporate and individual sponsors. Much like the Republicans wouldn't want to piss off the Richard DeVoses, Paul Singer, Tim Menton, etc.
Do you think that if Obama passed a law limiting corporate salaries and bonuses passed, that the Democrats would ever see a dime of any corporate money again? Assuming such a law was upheld by the courts?
Besides, if you read the law, it's pretty easy to get around, and basically throwing a bone to the masses, so he can say he did something without ever doing it.
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Do you think that if Obama passed a law limiting corporate salaries and bonuses passed, that the Democrats would ever see a dime of any corporate money again?
I suspect George Soros would find another party to support if he was forced to live on $500,000 a year.
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I suspect George Soros would find another party to support if he was forced to live on $500,000 a year.
I suspect any such law would have the necessary loopholes for the likes of Soros.
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Soros probably makes his money via stock dividends and proceeds from stock sales, not as a salary. I think.
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What kind of loop holes would allow Soros to avoid the salary cap, but not everyone else?
I think if they did a salary cap, they would have no choice but extend it to dividends and stock income, or else the execs they are trying to cap could just get paid in those.
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What advantage would there be for the government to cap private salaries involving companies not being subsidized by the government?
The destruction of the U.S. economy.
All it would accomplish is reducing the amount of income tax revenue those salaries would produce for the federal govt.
Re-read Saul Alinsky, go back and listen to Barack's answer to the capital gain tax cuts. The goal is not to raise revenue to operate the government but to destroy the economy so government gets to pull the levers.
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What kind of loop holes would allow Soros to avoid the salary cap, but not everyone else?
The same ones when we tried this inane cap on executive pay 25 years ago. The tax lawyers looked at the stupid surcharge on executive pay and then recommended stock options and IRA contributions and signing bonuses.
If not the old ones when the morons in the government tried this before, then new tax lawyers will recommeond different ways around it.
Complete and utter waste of time, money and effort.
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At least in Barack we have the Devil we know, and we have his playbook. =D
“Lest we forget at least an over-the-shoulder acknowledgment to the very first radical: from all our legends, mythology, and history (and who is to know where mythology leaves off and history begins -- or which is which), the first radical known to man who rebelled against the establishment and did it so effectively that he at least won his own kingdom -- Lucifer.” Saul Alinsky.
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What kind of loop holes would allow Soros to avoid the salary cap, but not everyone else?
Perhaps not loopholes, but people. Perhaps the same people who didn't notice Tom Daschle's tax "mistakes."
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Actually, the companies are still allowed to pay bonuses in stock, but the stock is frozen until the taxpayers are totally paid back.
Not a bad system, since it creates incentive to make profits and fix problems.
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while we are at it lets look at union leadership pay and cap it and make them take the samme percentage cuts as membership does. as well as pare the perks to bare bones.. no more fancy union houses
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Yes, let's do that.
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the union leadership would have to find a new way to steal more to keep up their standard of living.
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They're already talking about it.
Barney Frank: TARP's comp curbs could be extended to all businesses
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC&template=printart (http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC&template=printart)
Give 'em an inch...
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I sure didn't see that coming...
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Thanks for the info. That is a pretty scary decision. After reading that, it sounds like the federal government can do anything it wants to under the disguise of interstate commerce. My question would be whether or not the current court would tend to agree.
The current court holds the opinion that a plant grown on your own property for your own consumption, even with state permission to do it, still falls under the interstate commerce clause, and can be stopped.
Gonzalez v. Raich (Medical marijuana case from California)
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That said, I don't have a problem with salary caps if you're taking Federal dollars. My own employer has our salaries on his profit/loss sheet with the bank that provides his operating loan. Beginning this year we're reviewing how much money we bring into the company vs. how much it costs to keep us there every month. The bank, of course, is doing this too I'm sure.
The bank won't ever impose a direct salary cap, but they will withhold funds from my employer if his financial records look shaky, and might dictate a layoff if need be, or salary adjustments. It's happened before with us. No layoffs? No loan.
Of course, the bank's only interest is in getting back the money they're owed with interest paid on it. Politicians are more interested in getting votes in the next election.
The former is guaranteed to make logical decisions on the matter. The later, not so much.
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That said, I don't have a problem with salary caps if you're taking Federal dollars. My own employer has our salaries on his profit/loss sheet with the bank that provides his operating loan. Beginning this year we're reviewing how much money we bring into the company vs. how much it costs to keep us there every month. The bank, of course, is doing this too I'm sure.
I have a problem with it.
A loan does not grant an ownership interest over the borrower. The lender does not getto tell the borrower how to behave. The only authority a lender has over a borrower is enforcing repayment of the loan, plus whatever other conditions were stipulated as part of the loan agreement.
Unless it was part of the original agreement, the guy who loaned the money has no right to demand the borrower do anything at all.
I believe that salary limits were stipulated in the TARP loans, so I guess that's fair game. But I foresee FedGov using the TARP loans to impose all sorts of restrictions on recipients that were never part of the original agreement. The population will go along with it because they think that having FedGov money means FedGov gets to tell them what to do. It does NOT mean that.
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The population will go along with it because they think that having FedGov money means FedGov gets to tell them what to do. It does NOT mean that.
Hopefully the fear of being told what to do by the federal government will deter other private corporations from trying to get tax payer money.
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They're already talking about it.
Barney Frank: TARP's comp curbs could be extended to all businesses
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC&template=printart (http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090203/REG/902039977/1003/TOC&template=printart)
Give 'em an inch...
No surprise there.
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Is the government going to put a cap on how much government workers can make?
Further, why do government workers need unions? Is the government a mean, miserly employer?
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I would hope that a government restriction on pay for execs of companies not participating in TARP would be quickly struck down by the courts.
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The courts don't seem to have a problem with minimum salary requirements. Why then would the courts object to maximum salary requirements?