President Barack Obama imposed tough new rules on Wednesday to rein in corporate pay, capping executive compensation at $500,000 a year for companies receiving taxpayer funds as he seeks to put the struggling U.S. economy onto a new foundation.
"In order to restore our financial system, we've got to restore trust. And in order to restore trust, we've got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street," Obama said, calling such lavish compensation packages "the height of irresponsibility."
If these companies are going to take tax-payer money, then they should have to live by rules like these. Kudos to the president for trying to implement some controls around these "bailouts." Of course, some are whining about it. For example, as reported in the New York Times: “That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus,” said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. “And you know these companies that are in trouble are not going to pay much of an annual dividend.”
Oh, poor, poor babies. You ran an entire industry into the ground and now you have to squeak by on only half a million a year. Wah, wah, wah, you fucking whiners!
Wednesday, February 4, 2009
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21 comments:
Great, the government just provided another loophole for tax attorneys to have fun with.
Whats next, Uncle Warbucks will mandate what Joe the plumber can make?
Obama, you concentrate on choosing a patriotic cabinet who all pay their taxes and Americans will be happy. I know why the Dems do not mind raising taxes: They don't have to pay them.
You're all over the place there, Timmy boy.
1) Joe the Plumber (that idiot) is not taking government money.
2) So it is patriotic to pay taxes, but then in your next utterance you condemn Dems about taxes. Err, uh, huh?
3) If you live in SoCal perhaps you oughta worry about your bankrupt state first!
The name is Tim not Timmy my Demy apologist.
Not taking government money is the whole issue! Obama & the rest of the Dems don't mind giving away the money because they don't pay any taxes to begin with. Do you see the connection my little Demy apologist?
Joe is an idiot because I assume, poor Joe challenged him? BTW R U sure Joes is not taking some government money?
Who says I have no concern for my state? I have ability to multitask. We need to crack down on boarder moles, entitlements & environmental handcuffs & we will be just fine.
somewhere in southern california, a village is missing its idiot.
The bottom line on this one is that if you're going to take government money, then you should be forced to abide by some rules set by the government... if not, don't take the money.
Frankly, there are damn few people on planet Earth worth more than half a million a year (not that there aren't a lot that make more than that, they just aren't really worth it, IMHO).
Regarding the whole tax foo-fa-rah, I think it is a big deal about not much. Yes, these folks should be made to pay the taxes they owe. Yes, it should never have happened. And yes, it is good that they have withdrawn their names from consideration. But look at the tax code we have and how fucking complex it is and then it is easy to see how folks can fall afoul of it. Not saying I know that these weren't deliberate attempts to defraud the gummint, but maybe they were not. I try my utmost to make sure that I get my taxes absolutely right every year but as I get older and with more types of investments it becomes more and more difficult to make sure that I get things absolutely correct. I can only imagine what someone in Daschle's position (for example) goes through. Yes, he should have known that that limo service a donor paid for was taxable. And it is good he has withdrawn. But again, even CPAs mess up things given our horrifically complicated tax system.
A lone voice in the Santa Anna winds except the Santa Annas make a whole lot more sense.
Companies loan money to banks all the time. For that matter, China has loaned us more money than we will be able to payback in the next 50 years. I don't see these entities limiting what CEOs can make. I agree CEOs make too much money but that should be left up to stockholders & BODs. Not the government.
For that matter, when they get there house in order it might be a different story but government is getting to big for my comfort. Where was all the handouts when textiles was failing in this nation? We survived.
My heat bleeds for Daschle's of the world. These guys knew their taxes were not paid. They were even told & continued without payment. Maybe during my next audit I could invoke the Obama Cabinet exemption.
Corey,
What, someone is an idiot when they put the same critical thinking template on a government run by Democrats as they did when it was Republicans running the show?
Csm,
I remember a thread you started awhile back about how proud you were with the appointments Obama was making. Well politicians are politicians. You can call them public servants if you want, but most seem very self-serving to me. Even Obama admitted to some vetting mistakes, and Geithner ain't no prize. As the head of the New York Fed he sure didn't see CitiBank coming, or did he?
And as far as taxes being so complicated, should that be a surprise when our Federal Government is so unConstitutionally large and invasive with agendas which change every forth or eight year or so? If the Feds had stuck to protecting the Union and our precious civil rights, they may have never needed income taxes at all. A simple sales tax for the military. How novel.
bawdy,
what, you lost your sense of humor because i mocked a conservative?
verification word: ponsi (no kidding)
socaltim,
when taxpayers provide bailout money to corporations, they have the right to stipulate anything they please, including caps on executive pay. if the ceo's don't like that, then they don't have to accept said money.
Well, Bawdy, there is enough greed and self-interest to go around on both sides of the aisle. I still like many of Obama's appointees though...
And I can agree that simplification of the tax code is required, but your thoughts are much, much too simple. We probably disagree on several (maybe all) of the things in this upcoming list of things the gummint needs to be involved in: international diplomacy, intelligence gathering (CIA), space exploration (NASA), oversight of monopolies, monetary policy, support for the poor and needy, and, oh, isn't it obvious I'm a bleeding-heart liberal?
Well, it looks like were well on the way to Carterism now. They convinced a few RINOs to go along with this irresponsible omnibus bill (that's what it really is, not a stimulus). I suspect that Senators Collins, Specter, and Snowe won't be in office much longer.
Here's my prediction. This spending bill will be extremely bad for the country, but very good for Republicans (since responsibility for the whole thing rests solidly on the shoulders of the Democrats). This bill is the kind of garbage that stirred up people to give congress a Rep majority under Clinton... and to run Jimmy Carter out of office on a rail.
Back on the subject of the original post, I find it to be abundantly hypocritical for the govt to be dictating to the private sector what is and isn't financially responsible, while they just keep pouring more and more money into the grab bag of unnecessary programs... and voting for raises for themselves. That includes Obama talking about the irresponsibility of corporate executives while he spends millions on the inauguration. I'm not really saying it was wrong for Obama to spend that money. But when he did so, he lost the right to criticize others for doing similar things.
In an ideal world politicians would behave completely ethically and properly at all times, and there would never be any graft, hypocrisy or 'pork'. Of course also in that ideal world the folks on Wall Street and in charge of major corporations would do likewise, acting in ethical and forthright ways to the benefit of not just themselves, but of all their employees, and even of those people whose money was entrusted to them (or given to them by dint of sales).
We are, however not in such a realm. As it is those who get their hands on effectively unlimited money with no effective rules to constrain them tend to let greed overtake their better natures. We've just seen the result of such a situation. Also, unfortunately, in our world politics is an art of doing what's pragmatic (for you) while making it look good for the masses. Anyone who attempts to tackle this entrenched system with any sort of personal idealism or strict set of valued won't last very long in his or her elected office.
Greed and compromise are what run our world. Thus has it always been, and thus shall it likely always be.
Under the radar Obama issues executive orders to continue extraordinary renditions while closing Gitmo. When Bush allowed this practice he was crucified but you hear nothing as Obama does the same. When it comes right down to it it is more about which side of the aisle you sit on than it is the policy, More of the same we can believe in.
I agree with you on that one Timmy. I'm not happy with Obama on that exec order at all.
But G, I don't see the connection between the inauguration and a stipulation on executive salary for companies who eat at the govt trough. You are just looking for things to hate... which is fine, if that is what you wanna do.
I'm not just looking for things to hate. The connection is behaving in a financially responsible way. Like I said, he can spend whatever he wants on his celebration. But how can he then condemn others for tossing money around.
Maybe you would be more comfortable if we point out the congressional hypocrisy, having their retreat at an upscale location when they've been condemning private companies from doing the exact same thing.
If they want to add that stipulation, it's fine with me. I wish they'd never decided to hand out the money in the first place (yes, under Bush).
So $160 million on the inauguration of the first African American president (approx 450 million privately funded) is analagous to the meltdown of the US financial system in your mind, G? Just checking before I boggle my head back and forth trying to understand you.
And there is this. How many of you are in approval of this. It sure looks like this President will broaden his powers just like his predecessors. This might go a ways toward explaining his vote on nixing the legal liabilities on the phone companies giving up private communications of our citizenry.
"Obama to revamp National Security Council: report
Sat Feb 7, 11:23 pm ET
WASHINGTON (Reuters) – President Barack Obama plans to expand the membership of the National Security Council and increase its authority to set strategy on a wide range of domestic and international issues, The Washington Post reported on Saturday, quoting his national security adviser.
The council, which was established after World War Two to advise U.S. presidents on military and diplomatic matters, would become "dramatically different" after the overhaul, national security adviser James Jones told the paper in an interview.
"The world that we live in has changed so dramatically in this decade that organizations that were created to meet a certain set of criteria no longer are terribly useful," Jones, a retired Marine general, was quoted as saying.
He said sections of the government not traditionally part of the council would be brought in on a case-by-case basis -- he named the Energy Department, Commerce Department and Treasury, and all the law enforcement agencies, including the Drug Enforcement Administration.
"New NSC directorates will deal with such department-spanning 21st-century issues as cyber security, energy, climate change, nation-building and infrastructure," the Post said.
Jones said the new structure would be outlined in a presidential directive, probably in the coming week."
The more things change, the more they stay the same; and it doesn't matter who is the leader. Something I have been railing against since I started blogging.
csm,
When did I say anything about the US financial system meltdown? I don't know whether or not it's intentional, but you have a tendency to twist my words into something I never intended.
I didn't want to have to take the time to get into specifics, but I guess I have to.
- AIG gets scolded for having a swanky executive retreat, but congressional democrats are doing the same thing as we speak.
- Merill Lynch gets scolded for remodeling their offices, but the Obamas are doing the same thing with the White House.
- Auto executives are scolded for taking their private jets (which they already own, by the way) to Washington, but how many members of congress DON'T take private jets on their interstate trips.
- Financial companies are scolded for giving bonuses at a time when their poor financial decisions have caused a meltdown, but the "stimulus" is just handing money to the states that are going bankrupt because of their poor financial decisions.
Etc, etc, etc.
My point about the cost of the inauguration was simply that if the govt sees no need to cut back at a time when the nation is headed toward insolvency, then what right do they have to tsk-tsk private companies that behave the same way?
Bawdy,
I'm disturbed, but not surprised at all. I imagine that at some point we're going to see quite a bit of blowback in the form of court challenges. But what else should we expect from those who consider the US Constitution to be a "living document" (i.e. open to changes of interpretation to suit one's personal agenda).
http://www.propublica.org/article/bailout-plenty-of-limits-to-obamas-new-exec-pay-limits-090204
While on the subject of restrictions to executive pay, this story outlines the Obama limits to these restrictions, not quite as onerous as we are lead to believe.
The financial problems we are encountering now cannot be considered anything more than a typical recession. We are not anywhere close to "another great Depression" as news outlets would like to say. This just sells papers and gets ratings for TV. This hasn't even reached the depths we experience in the late '70's and early '80's(the exact moment that Keynesian economics were relegated to the academic dustbin only to be resurrected like Frankenstein). The reason it hurts so much this time is the fact we got so much more ahead of ourselves(high real estate prices, extensive credit card debt, low savings rates, etc.)than ever before. Many more people have 401ks than ever before. More people own stocks now than ever before. This is the reason for the outcry. We are a spoiled population. We love the boom times, but cannot stomach the down times which are natural and inevitable with the system we have. I have credit card debt and too much of it. I have two mortgages. I have an IRA and a 401k. I own stocks. I am as exposed as the next guy, but I am not looking for the government to help me out, make me whole. I went into these transactions with open eyes and a realistic vision of the types of things which could go wrong. What I didn't envision was the federal government micromanaging the economy to the degree that I cannot at this time formulate any plan for my future because I have no idea how these bailouts and stimulus will affect my plans. Which winners and losers the government will pick. How long the government will stay involved. What other sectors the government will bailout because they are too big to fail. If I cannot make definite plans how can any company?
And if the past is any indication, the government will be involved much longer than even they are willing to admit as it is very hard to wrench anything back from the government once they have latched onto it. An interesting thing to ponder, will Washington supplant New York as the financial capitol of this country? Don't bet against it.
http://www.propublica.org/article/citigroup-bank-of-america-bailouts-will-get-a-hard-look-090205
This is a link to a story concerning the beginnings of the TARP in respects to CitiBank. It alludes to what I was saying about the meeting Henry Paulsen had with the nine biggest banks and how he pressured and cajoled them into signing on to this program. Granted Citibank was worse off than they were admitting, but "we(they) did not seek this investment". Wells Fargo, who has never been mentioned as a "bank in trouble" reportedly was the most vocal in their dissent against this program, but relented under the pressure of the Secretary. It sure looks like to me these banks were pressured so that the rest of the banking industry would fall in line, especially since smaller banks rely on these behemoths for loans and other transactions.
I have been saying since this whole thing began with the deal for Bear Stearns that this was a federal powergrab and nothing, absolutely nothing, has deterred me from this line of thinking since.
Now that more and more evidence has come out the government pressured these institutions to form a line for government money, that restrictions for executive pay, though they play well to the average Joe, are somewhat disingenuous.
And the fact that the ex Pres of the New York Fed, Geithner, is now in charge, makes me want to puke. It is one thing to fuck up on your taxes and then pay up when it is politically expedient, but to get the Secretary position when he had everything to do with Citibank's situation and the lack of "regulation" in this instance, is reprehensible.
And again, G, you miss the point. {sigh} So be it. When the US govt is about to go out of biz and then asks for a "loan" or "bailout" from another entity, then we can expect that other entity to impose rules or guidance on how we act.
Might happen with China, actually.
I do understand the point. But it is still hypocritical.
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