Posted on 02/05/2009 6:35:52 AM PST by shortstop
It’s ironic that on the same day the president set a $500,000 cap on executive pay, his campaign manager signed a book contract for more than $1 million.
Actually, it’s more than ironic.
It’s hypocritical.
When a president who – in 2007, the last year he was truly employed – made $4.2 million in a year, says that others are greedy for getting more than $500,000, it’s a pretty good example of “do as I say, not as I do.”
Barack Obama’s pick for secretary of Health and Human Services – Tom Daschle – had to step down because he had unpaid tax on free car service that totaled $128,000. If that was the tax on it, how much was it worth? When you have an unpaid tax bill – for your limousine and chauffer – that’s three times the national median income, you’re not really one of the “common people,” are you?
And it is odd that an administration of millionaires is attacking people for being millionaires.
More importantly, it is stunning that in the United States – a supposed land of liberty, checks and balances, and a free economy – the president can, by simple declaration, set a maximum wage.
It’s a Marxist’s dream come true.
The background, of course, is that the president has been very indignant about what he calls the excesses of corporate executives. They travel in private jets – like he has for the last two years – and they make more than a million dollars a year – like he does – and they get bonuses for their jobs – like his wife did at her last job.
And they’re wrong.
The worst part, he says, is that the executives of banks and companies taking money from the government are sometimes getting bonuses. To stop that, he has put a cap on their compensation. Unless it’s some stock option or deferred payment that’s put off until every dime of government money is paid back, no big boss at any of those companies can make more than $500,000 a year.
Which makes a lot of people happy.
But it shouldn’t.
Because of its practical impact, and its theoretical implications.
Let’s take the last part first.
Karl Marx taught that those who make little should envy those who make much. Much of current American politics is based on that principle, that we should hate the rich – which is anybody who has more than we do – and we should believe that they have what they have because they stole it from us.
That’s why CEOs are the current villains of American society. Instead of being admired or congratulated on their success, they are vilified and held up as boogie men, the scapegoats of our economic angst.
So the president caps their salary.
No executive order, no resolution from Congress, no bill passed and signed into law – nothing whatsoever that can be challenged by due process – just the word of the president. “Thus saith the Lord” had been trumpeted across the land and the cap is set.
Which sets a precedent that any wage can be capped. The free market has been decapitated.
And everybody is glad.
Because it is immoral for anyone to make that much money in times like these.
Which ought to be big news to the NBA and the NFL, and to all the Hollywood blowhards who bankrolled this president’s campaign.
In America, wages are supposed to be determined by what the market will bear. Typically, those who administer multi-billion-dollar companies are paid handsomely. Not many people know how to do it, and it takes years to develop the ability.
Doctors make huge amounts of money, architects make huge amounts of money. Both those professions take years and years to acquire. Business owners whose companies are successful make a lot of money. Inventors of useful and marketable items make a lot of money.
But now American business has a wage ceiling. And the various bailouts – passed or planned – will spread into so many areas of the economy that this cap almost becomes nationwide. In one fell swoop, the president has capped the salaries – and consequently limited the impact – of a group of people who mostly didn’t vote for him.
That’s some nasty payback.
And it is going to have some nasty consequences. Right when American needs experienced business people and bankers to help it dig out of a potentially monumental mess, the president has decided to punish them. He has also created a situation that will push some of them to foreign companies. If American companies have a wage cap, and a foreign business or bank comes offering more, what is an executive going to do?
And why would a skilled banker or businessperson push to get to the top of their profession when it contained a wage cap? Most Washington lawyers make more than $500,000 a year, most former-politician lobbyists make more than $500,000 a year, so why would a very talented person want to stay in the corporate world?
And finally, given that the largest portion of New York's state income tax comes from Wall Street salaries, the attack on bonuses and the cap on wages kills a revenue stream for a state that is teetering on the far side of bankruptcy.
At the same time the president is pushing a $900 billion package of pork for his Democrat colleagues and constituents – a bonanza of liberal special-interest money that will feather Democrat nests for years into the future – he is feigning indignation at people who are making just about the average of his cabinet members’ pre-government salaries.
This isn’t change, it is demagoguery.
Last week he attacked Wall Street bonuses, though he clearly must know that those are merely commissions, a conventional part of compensation for lower-level brokerage employees. This week he attacked banker salaries, knowing that almost all CEOs who have asked for public money have already lowered or eliminated their salaries and ended all perks.,p>
It’s grandstanding.
And it’s a dangerous precedent.
Because the last major country to have a salary cap was the Soviet Union.
Then, you and your fellow shareholders should put a cap in place for every company whose stock you own.
I have to wonder how many CEO retirements will result from this cap. The loss of business leadership certainly won't help these companies.
Works for me. Bad businesses should fail...that is the essence of capitalism. The good succeed, the bad fail.
Bullcrap. If their banks followed the normal rules, they would be bankrupt, and executive salaries would be zero.
The executives decided to be marxist-oligarchs, and get their friends in DC to use MY money to take the hit for their sharp-shooting internationalist banking scams that fell.
Then, as soon as they had taxpayers cash which they had NO right to, they became “free market capitalist” again. A massive reduction in their pay seems to reflect their performance. In truth, they are public employees now. And with a poor track record.
And of course,,they are always free to go work for a non-bailout firm. And then they can freely demand the 50,100, and 300 million they believe they are worth.
Theres a reason why they don’t. The bailout might be socialist, but capping the pay of federlly funded employees such as bank executives, isn’t.
And indeed they DID get money from the taxpayers with no strings attached during the FIRST round of bail-out - which I blame on George W. Bush, the Democrats in Congress, and the Republicans in Congress, in that order.
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Nope. Those who already took TARP monies are excluded. This is nothing but PR.
And yet, many banks did not engage in the same unwise decisions and are having no problems today. It was the banks that insisted on doing the wrong thing that went screaming to us for welfare.
So yes, I will call these banks and their executives welfare bums and give them the level of respect that someone on welfare deserves.
My brother was a CFO of a bank. He saw the financial disaster roaring down the government track and did the smart thing. He retired 2 years before everything imploded.
Blaming the CEOs for this government mess is ridiculous. They merely trying to hold things together for the investors in their businesses, and it was their responsibility to do that.
The Marxists ( who are all really fascists) won. They will move forward to either nationalize the entire banking industry, or move to enact total fascist control over it.
No we should be standing our ground to put the pressure on to stop this now before it gets to the point of no return.
You’ve told me nothing I did not already know.
Now, please tell me who, in the government or ACORN, put guns to the heads of the “...bunch of people who couldn’t really pay their mortgages because they were too poor to start with..” and FORCED them to take out these mortgages.
Thank God you are not a CEO.
Nice try, but not even the same, either in scale or in concept. Social security takes from you your whole life, annd returns an amount that would be criminal if the private sector did it.
Student loans? Must be repaid or all kinds of federal consequences can occur. Student loans are not at all unconditional.
How are these the same as a business that failed, demanding that *I* pay their losses, and pay them a 100 million and up salary to do it to me again?
Its amazing to see some people *even yet* defending the performance of these guys.
.This was planned crisis to allow Government to be able to come to the "rescue". As a result, the American people are championing their goal of taking over and controlling private enterprise.
The the government needs to act in the role of a shareholder, and pressure both management and the board of directors. That's not whats happening, the government is issuing a mandate outside their role as shareholder. That's not capitalism, it's central control.
Bingo!! JUst wait until the Govt tells some of these people here how much thier profession can make, then you’ll hear the screaming.
I am so tired of people not looking at the consequences of this move.
This is a major disaster coming fast and furious down the track.
Sure, I am a bit mad at these companies, but this is NOT THE ANSWER!!
I'll go you one better. Limit every member of the Executive, Judiciary and Legislative branch including staff to $500,000 of income per year. Not just salary, oh no, that $500,00 includes the market value every damn perk they get. Car and driver: Cha Ching, Franking: Cha Ching, Air travel: Cha Ching, Allowance for any office outside DC: Cha Ching. Book deals and speaches made by staff: Cha Ching. Then make them abide by the limit after their service ends so they don't get to parlay their time in office into massive wealth or fees given for BS "consulting" work. Oh, and make those b@stards start paying Social Security too.
See post 54 as to the governments role. I used the term central [economic] control, but dictator would work too. I should point out it's not "one man", rather a government official.
I don’t feel sorry for these executives at all. They took the government money, so they have to dance when the gov’t plays the tune.
If they wanted independence, they should have stayed independent.
You didn't give them the money, you lent it to them. The government is generating positive cash flow on the deal, charging 5% to 8% while borrowing at sharply lower rates. Regardless of your feelings about "just desserts", do you really accept a centrally planned Soviet style economy as their price?
That aside, the whole think is nonsense. It will apply only to a handful of executives, those bonus' that offend you go to hundreds, the overwhelming majority of whom aren't covered. Which is a good thing, since they'd simply leave for greener pastures, aka non-US and non-participating banks. Foolish economics, made possible only by the class envy across the political spectrum which The One is tapping into. He's good at that.
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