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.
____________________________________
Show me where I did.
It's amazing to me that some freepers *even yet* read things that have not been written.
The only thing worse than stupid people making their own decisions is bureaucrats making decisions for them, because the bureaucrat cannot learn from his mistake.
So, we had a bunch of stupid people making decisions. Whoops!
For example, the house I bought last summer was previously “owned” by a nice retired divorced school teacher. She talked her son / builder / real estate agent (all the same guy), into building her a dream home on her family’s historic land here in Southern Oregon.
Well, she bought the .44 acre lot for about $425,000. It has a nice view, but not that nice. He built her a $250,000 house, taking no margin, and doing a really nice job. It is an excellent house. By the time they were finished, the retired school teacher with her little pension and social security had a loan for $670,000 on the house. That was the top of the market.
When we met her, she was eating cat food and wearing sweaters because she couldn’t afford to heat the house. Monthly loan payments were probably around $3,400, more than all her combined, fixed, income.
Whoops!
And this was a school teacher. Tells you something about the quality of edumacation in Oregon.
So, she was listing the house for $600K, knowing she would take a bath. It didn’t sell for a year, because the housing market was falling apart.
So she reduced the price to around $525K, at which point we showed up. We dickered down a little, and after a whale of a lot of pain, the banks took the loss ($670 less $5XX) and she walked away.
Repeat with variation across millions of homeowners.
Now, each of those people had to make a few stupid decisions. But what lead them to believe that they should ignore all history and guidelines and buy excessive housing? The bubble. What started the bubble? The factors I explained.
Once bubbles begin, they are self-inflating. “Popular Delusions and the Madness of Crowds.” Tulips. Internet stocks. Ponzi schemes. Pyramid schemes. Many foibles of the human critter are repeated regularly.
This particular one could not have started (IMHO) without the factors I point to. My retired school teacher was just the last one to the party. Was it her fault she bought too much house? Sure. What convinced her that it might make sense? The bubble created by the Fed.
IMHO.
Barney Frank has already suggested that. There's hardly (I can't think of any) a job in America that doesn't in some tangental way depend on the government, they're all fair game.
The only salary cap that should apply is the one imposed by the Judge presiding over the bankruptcy.
Already taken or taken in the future, the application is the same although it should be a warning to companies about what they face if they do take tax money. But then again, rightly so. When I entered my military career I knew full well that I had to follow their rules and be accountable. We should expect no less from companies who take our tax dollars.
And it sets a precedent that, where government money is involved, Obozo or his minions can now set salary caps. [See the same concept, in the context of quotas, with Title IX, athletic programs and colleges that directly, or indirectly, i.e student loans, get Federal money].
How much money do you make?
Please, please, please tell me it's none of my business, because that's the point.
What business is it of anyone, even (especially) the President and/or Congress to decide what someone else makes in a free-market economy, particularly considering that most of them fly around in those "evil" private jets and have millions of dollars themselves.
And please don't use that "public trough" canard. This is about far more than just some Wall Street "welfare queens". The govt. essentially forced a number of institutions that were/are otherwise solvent and healthy to make risky loans, then forced them to take govt. money. Ask yourself, "Why?". Was it so they could then force them to comply with new rules because they "took taxpayer funds"? Where does that end? With your job?
This entire thing was engineered from the start to create panic, distrust in the economic engine of America (and thus the world), and erode confidence in the foundations of free market Capitalism. Salary caps are just another age old Marxist/Socialist tenet. Don't think for a minute that this "just happened" and they are trying to "rescue" us. Don't think that Obama doesn't know anything about economics, he just believes in a different economic principle than you do.
Unlike the govt., at least the folks on Wall Street actually work, and the work they do generates huge profits. No-one bitched about Wall Street when their 401k's were riding high. It wasn't Wall Street that knocked them down, it was Pennsylvania Avenue (before and after 1/20/09). Profit is the solution to the economic mess we are in, not the problem, no matter how much the Communist in Chief, and his accomplices demonize the "exchanges" (an age old Communist canard to force their agenda, BTW: read Stalin, Lenin, Trotsky, and Malenkov). Compensation, proportional to profit, is the best incentive for making higher profits. BTW, the "bonuses" the media is crying about are, for the most part, actually commissions for work already performed.
This crap will ultimately limit compensation for executives in any industry that gets any government money, and that will stifle economic growth in all sectors (they are all interdependent). And, it is just the beginning. What will you say when they come for your salary? Don't think that isn't on the agenda. And don't think the Dems aren't enjoying us supporting their assault on Capitalism with your complaints about Wall Street. So what if a Wall Street firm buys a corporate jet. At least the guys who build jets and their suppliers and vendors got paid for that, right?. If Chase spends a million dollars to redecorate their offices that means someone gets paid for the work, right?. Where I'm from, that's just called commerce, and commerce is the only real stimulus this economy needs. Quite frankly, who the f*** are you to determine how anyone, other than yourself, spends money? How would you spend it?
The CEO of the company I work for (w/many government contracts) is responsible for the livelihood of over 55,000 people. I want him very well compensated for that responsibility, with plenty of incentives to do even better so our company will expand and thrive, and I don't begrudge him a single penny of his salary/bonus/whatever other compensation he gets. To do otherwise is veiled class envy. His high salary is no more my business (nor yours) than are the lower salaries of the Janitor, my Secretary, or one of our Engineers.
Damn, it's nice to see someone who get it, great post.
This whole thing was planned from the git go.
What is amazing is that the people are now rooting for government control of private business because it's their money. When you hold the purse strings you have the control so they gave the purse to the taxpayer. Really, pretty ingenious if you ask me.
Then 0 gets up and says we're not going to reward and continue to pay for failure with tax dollars, with a straight face I might add.
Simply amazing.
BTW, there is no such thing as "government" money, only tax payers money.
You can't let government say how much someone can earn. The bottom line is this: The so called stimulus bill is unconstitutional and should be stopped forthwith, no funds should be given to businesses by the government for any reason what so ever.
The BS screaming over bonuses by the Senate and Bozo is smoke screen designed so they can do what they want without anyone making a fuss over it. Scare people or outrage them, that is a typical communist tactic and needs to have the brakes put on NOW.
Perhaps Obama should a place another cap: If you owe more than $500,000 in back taxes you can't be appointed to a Cabinet position. $499,999 is OK.
Bam! Right on the money.
It's sad to see how many people here are falling for the set up.
Great post, BTW
Keep dreaming. Until we get beyond the idea that any institution is "too big to fail" we will always be hit up to make welfare payments to poorly run companies.
People should still be personally responsible for their own mistakes.
My father taught me early on that if something looks to good to be true, then it IS (not probably, but IS) too good to be true.
I have lived in the same house for 18 years. I paid $80,000 for it, put another $55K into it to double its size, and it is now “worth” about $300,000 (after the bubble burst). I owe about $90K on it.
I haved lived within my means and I now have to “bail out” those entities (individuals, bankers, whomever) who lived “high on the hog” and beyond their means..
I refuse to lay the majority of the blame for the “bursting” of the bubble at the feet of our government. It is the fault of the people who took the “too good to be true” loans, and the banks that made the mortgages. There are plenty of banks that DIDN’T succumb to greed during the “good” years and they DON’T need “bail-outs”.
I DO blame the government for NOT holding the greed-heads responsible for their actions, but instead forcing ME (and the millions of others like me) to pay for their mistakes.
To do otherwise is veiled class envy.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
It would also be breaking the last of the Ten Commandments. ( The Commandment not to envy your neighbor’s goods.)
When any one of the Ten Commandments are broken there are not only personal consequences but societal consequences as well.
I’m with you on 95% of that.
You aren’t getting my point. The reprobrate Bawney Fwank said that this salary cap could extend to include ALL businesses not just those who received the bailout money.
But we don't HAVE a free market economy.
I agree completely, however they did. As shareholders, and guarantors of some debt. Not the first time they've done this.
Class envy is and always has been a strawman for Liberals. When it comes to tax-payer funds, suddenly it is my business.
That's right, the question is whether to act within the law, as a shareholder, which probably won't accomplish much, or break new ground in the level of governmental control over the economy. I'd suggest the former is preferable.
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