Posted on 10/22/2009 4:32:33 AM PDT by SeekAndFind
Worried about a potential slippery slope with the Obama administration dictating what people are paid in the private sector - TARP bailout or no TARP bailout? Message from CNBC's Jim Cramer: Get over it.
On CNBC's Oct. 21 "Street Signs," the "Mad Money" host ripped into Wall Street executives that objected to the government dictating the rules of compensation. Opponents argue these pay restrictions inhibit Wall Street firms ability to retain the best employees possible - an argument Cramer says doesn't matter.
"Hey, there's no God-given right to work at those companies," Cramer said. "These people can go off if they want to. I know that [Citigroup Inc. Chief Executive] Vikram Pandit has kept 23 of the top 25 people with very severe pay restrictions. If you believe in your institution, you stay. See, a lot of Americans are looking at those pay cuts and thinking, ‘How do I get in on the action?' So I don't really care."
The "Mad Money" host argued it wasn't just a "populist phenomenon," which suggests it's a political movement meant to capitalize on the current mood of the country.
"I want to emphasize - this is not a populist phenomenon," Cramer said. "In other words, we're paying these people's salaries so let's get serious about it. I totally agree we need more pressure on these companies to raise capital to get the government off their back. If they can't raise capital to get the government off their back, then what's the matter with having a lot of young hungry people go work there?"
He did admit there were some cost-of-living issues that made it necessary in New York City, where Wall Street is located, to compensate at a higher amount, but he says they should have saved for a rainy day.
"Now, in New York City, it does cost a lot of money to live," Cramer said. "It's absolutely true. It's really difficult to make it on money that sounds absurd to people if they live in North Dakota. But I have to tell you - I say, ‘You know what guys, you made millions of dollars from 2000 to 2008. What the heck did you do with it, that you can't live off it now? Didn't you buy any munis [municipal bonds]? What you - did you let it run?'"
And if you didn't save, if you spent he says "just too darn bad" if you reject the government's push to limit pay.
"Hey listen, I was in for the ride," Cramer said. "I know what it was like. You either saved and you could live off that for a long, long time or you spent and you're working there, well you know what - you got to go somewhere else and that's too bad. It's just too darn bad."
"Street Signs" host Erin Burnett asked Cramer if this could have an effect on other Wall Street firms not in the purview of the federal government, but instead were afraid of the bad PR they could receive for objecting. And although one could argue it was none of Jim Cramer's damn business what these employees may have done with their pay in the past, he said they should have invested in New York State municipal bonds.
"I mean, look again - I harp back to the same untold stories," Cramer said. "It's a story from New York magazine I mentioned from awhile ago, which is if you worked at these places, you made millions. If you invested the millions correctly, which is typically New York State municipal bonds, then you have no problem living off this. People ought to recognize that this is what this is about. You have savings. These people can live off their savings. It's never talked about. It's the untold story. It's like these people were paid $10 million in 2005 and unless they put it in the incinerator, they can live off that. So I don't feel any sympathy for these people."
If they did buy munis, then essentially the poor and middle class in New York will be taxed, and they will be given the money.
Well, obviously the Obamanoids threatened Kramer enough to get him in line. Never understood how a libtard who makes millions in the stock market reconciles their good fortunes.
If you take the king’s shilling, you do the king’s bidding. If they didn’t want politics overriding business decisions, they should not have taken the government bail out money.
“Hey, there’s no God-given right to work at those companies,” Cramer said.
Actually, there is a God-given right to the pursuit of happiness, which equates to a mutual private agreement between an employee and the employer.
TC
Ignoring for a moment the whole issue of "How much, if any, government intervention in bailing-out/running private companies is appropriate", the folks whose pay is being restricted have been instrumental in running their companies into the ground.
Maybe "second-best" employees would actually do a better job.
At least make sure not to hire any f****** Harvard MBAs. They're the Kiss of Death.
There were probably a few top people at these companies that made the bad decisions. Those people deserve to have their pay eviserated or, in some cases, prosecuted. However, there are likely many hundreds, even thousands of talented, dedicated employees that make up the backbone of these companies. If those people get shafted, they will leave for elsewhere. As a result, these companies will be a virtual shell of themselves.
This whole issue proves, yet again, that the Feds had no business getting involved w/ the private sector businesses.
But Goldman Sachs and JP Morgan (who probably got the greatest benefit from the TARP) used “our money” so effectively, they have now paid back the TARP, yet continue to pay large salaries. But their salaries aren’t regulated. Something smells like cronyism to me. Plus the fact that with the other companies, there’s no formula for reductions, it’s just a subjective determination by some czar what each will be allowed to make.
Flashback April 01, 2009
RE PAY CUTS- Neil Cavuto Gets Heated with Congressman Alan Grayson. http://www.freerepublic.com/focus/f-news/2220221/posts
Until SOMEBODY stands up to this abuse of power, it will continue.
If they don’t fight it, they deserve what they get. This is not legal and the Czars should NOT have this power... they should be advisors only.
“If you take the king’s shilling, you do the king’s bidding. If they didn’t want politics overriding business decisions, they should not have taken the government bail out money.”
Very well stated. I don’t know why others here don’t get it - I believe it’s just the firms that have taken bailouts that will be restricted in what they pay their “best and brightest” (i.e., those who helped run their companies into the ground).
So if they don’t want their compensation regulated, don’t take the bailout! If the free market ran its course, these people would have likely been out of work anyway! At least they still have their jobs, even if at a reduced salary. That’s more than many of us have.
Wow. What a video.
That is the creep that told all Republicans to die quickly... he looks strangely a lot like Axelrod. Greasy and dirty and used-car-salesmanny.
Yuck !
Man, that’d be a REAL shame.
Welcome to the USSA, this will surely help the economy.
Pray for America and Our Troops
If the government bails out all the news organizations it can cut the salaries off all the reporters like Olberman by 90% !
LOL I would like to see how that changes their political tune.
Yeah, maybe they can go to China and “help” the economy there.
The court jester arguing for dictatorship. Where does the government get the authority to dictate incomes of individuals at private businesses?
America at this time is lost, we have to get her back!
Cramer admits to making millions. He should no longer be paid by the network and live off of his millions while he works.
Therein lies the problem. Yes, Wall Street screwed up and they shouldn't have taken the TARP money but the government (Freddie and Fannie) had a big hand in causing the financial crisis as well. If they are dictating pay for Wall Street jobs today -- it could be Main Streets job tomorrow. This is a slippery slope. Do we really want to go down this road?
So basically - they want to make sure the best and the brightest DO NOT work for government owned banks.
HA!
Good point.
The “best and brightest” invented the credit default swap didn’t they?
And then proceeded to magnify and multiply the screwups at Fannie/Freddie.
I’ve been snickering over the plight of poor ‘ole Harvard losing a billion dollars in their bad derivative deals.
oops!
I agree with you and I agree with Cramer (for once).
But the worst hit in this decree are the city and state of NY. They're going to lose big on the taxes that would have been generated by these big salaries and bonuses.
Well, when street hustler meets street hustler, and cheek meets cheek ;-)
“At least make sure not to hire any f****** Harvard MBAs. They’re the Kiss of Death. “
LOL. In the past, I have hired one Harvard MBA......he thought I was working for HIM......broomed him 90 days later ;-)
Silver lining: no company will ever take federal bailout $$$ again. The fascists* have just destroyed their most effective tool for gov’t takeover of private business.
(* - I don’t mean that in a derogatory way. I mean that per the dictionary definition of a legitimate word.)
If “fair” trumps “constitutional”, then I say Obama, Cramer, and all the rest can fairly stuff a large stick of dynamite where the sun don’t shine - and then light the candle so they can see better!
So you are on record in favor of one-sided open-termed contracts between companies and government, where government doesn’t have to spell out the terms up front?
You and I likely agree that the bailout shouldn’t have happened.
But you appear to believe that the government can rightfully modify the terms of any agreement retroactively. How ex-post-facto can one get?
BTW - I believe that the idiots running these and many other companies are wildly over compensated, but I understand it is not my right to decide that (I don’t own the companies).
Barack Hitlerama couldn't have explained the thinking any better than he did.
Leni
I may be wrong, but I suspect that a significant percentage of these “sophisticated, NY, cocktail-circuit, weekend-home-in-the-country, progressive” types voted for the Big Zero. Hence, they can now reap the rewards of doing so.
Frankly, this is probably going to spawn lots of new, entrepreneurial enterprises because the “big bucks boys” will not stick around and earn peanuts when they have the smarts to make some really big money by going out on their own (where the gov’t can’t touch them...yet)
Furthermore, there will always be up-and-coming people to step into the now “lower paid” positions because they are a leg-up to the next level down, and yes, I realize how confusing this sounds.
Wow! Cramer is actually right for once. The wall street pigs simply aren’t interested in competative pay rates. We should outsource their jobs to India so that they understand what the freemarket really looks like.
Elsewhere, Freddie Mac is giving its chief financial officer compensation worth as much as $5.5 million, including a $2 million signing bonus. The government-controlled mortgage finance company doesn’t have to follow the executive compensation rules because it is being paid outside the Troubled Asset Relief Program, or TARP.
http://news.yahoo.com/s/ap/20091022/ap_on_bi_ge/us_obama_executive_pay
Geithner: Government Wants Legislation on Exec Pay
http://www.cnbc.com/id/31207775
Not that long ago...
If these traders are so good and valuable, why did their companies collapse and need a bailout from the taxpayers?
A lot of it went up their noses.
Are you suggesting that folks who buy municipal bonds are exploiting the poor and middle class? the poor pay little tax outside consumption taxes.. and execs could have bought Munis anywhere
“But the worst hit in this decree are the city and state of NY. They’re going to lose big on the taxes that would have been generated by these big salaries and bonuses. “
Good
“If those people get shafted, they will leave for elsewhere. As a result, these companies will be a virtual shell of themselves.”
If there had been no bailout, they would have, and should have, done so last year. Their jobs may have been saved by the bailout, they benefited from the bailout. They look the king’s shilling by staying in their jobs.
Yeah, in a away it’s good, except for the fact that Obama will find a way to make up for the shortfall out of stimulus funds or some other federal program, and that places the burden on all of us. I’d rather the Wall St. bagmen pay it.
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