Government now dictating pay for Wall Street executives.
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Thread: Government now dictating pay for Wall Street executives.

  1. #1
    Join Date
    Sep 2007

    Government now dictating pay for Wall Street executives.

    Let me say that while I am at times incensed by what corporate executives earn, I never felt that government should be in the business of deciding how much they should allowed bo be paid. Those who asked for and received taxpayer money to be kept afloat, ok, but what about those who didn't? I thought that Obama would at least implement his brand of socialism a little more gradually than this, but in light of this development, it's now happening at an alarming pace. What next? Putting restrictions on the amount of time people are allowed to spend per day running their air conditioners, all in the name of "environmentalism?" This president and this Congress must be stopped!

    House votes to restrict Wall Street pay - Yahoo! News

    WASHINGTON The House voted Friday to slap restrictions on how Wall Street executives are paid after nine banks that took government bailout money rewarded thousands of their employees with bonuses topping $1 million each.

    Bowing to populist anger and defying President Barack Obama's suggestion that government rely on incentives instead of intervention to curb excessive salaries and bonuses, the House passed the bill on a 237-185 vote.

    "This is not the government taking over the corporate sector. . . . It is a statement by the American people that it is time for us to straighten up the ship," said Rep. Melvin Watt, D-N.C.

    Although the bill doesn't give Obama exactly what he wanted, it advances the first piece of his broader proposal to increase oversight of financial institutions. The Senate was expected to take up the package after Congress returns in September from its summer recess.

    The House bill includes Obama's suggestions to give shareholders a nonbinding vote on compensation packages and prohibit directors on compensation committees from having financial ties to the company and its executives.

    But the bill goes farther than Obama wanted by prohibiting pay incentives that encourage employees to take financial risks that could threaten the economy or viability of the institution.

    Obama said giving shareholders a "say on pay" and diminishing management influence on pay packages would go far in curbing the lavish pay seen at some banks.

    Rep. Barney Frank, D-Mass., who sponsored the bill, said the extra regulation is necessary to ensure bankers and traders aren't rewarded only if they take big risks. Under the provision banning risky incentive-based pay, regulators would be given nine months to dictate precise guidelines.

    If a bet goes wrong, "the company loses money and the economy may suffer, but the decision makers do not," he said.

    The vote came one day after New York Attorney General Andrew Cuomo reported that the nation's biggest banks awarded nearly 4,800 million-dollar-plus bonuses in 2008 even as their profits dwindled and they accepted billions in government aid.

    Citigroup, which is now one-third owned by the government after taking $45 billion in government money, gave 738 of its employees bonuses of at least $1 million, even after it lost $18.7 billion during the year, Cuomo's office said.

    Aware of voter outrage on the bonuses, Republicans reluctantly pushed back. They said severe restrictions should apply only to banks that accept government aid.

    The legislation's ban on risky compensation would apply to any firm with more than $1 billion in assets, including bank holding companies, broker-dealers, credit unions, investment advisers and mortgage buyers Fannie Mae and Freddie Mac.

    The effect will be to force "financial institutions who did not contribute to the crisis to pay for the mistakes of others," said Rep. Michael Castle, R-Del.

    Rep. Jeb Hensarling said the government would be better off terminating the $700 billion bank bailout program established last year.

    "If you quit bailing out risky behavior, Mr. Chairman, you'll receive less risky behavior," said Hensarling, R-Texas.

    Republicans also cast the proposal as too liberal even for Obama.

    Frank snapped back: "We are not taking orders from the Obama administration."

    Also on Friday, a group of 11 bipartisan senators pressed Federal Reserve Chairman Ben Bernanke to name the financial institutions that have received emergency assistance from the Fed and disclose how much help each received.

    The Fed has invoked its emergency powers to provide assistance to some banks, but has not disclosed the details out of concern that the information would cause a run on the institutions.

    The senators, led by North Dakota Democrat Byron Dorgan and Iowa Republican Chuck Grassley, said the information should be released now that banks are reporting profits and paying back bailout money.
    Any society that would give up a little liberty to gain a little security will deserve neither and lose both.

    Benjamin Franklin

  3. #2
    Join Date
    Apr 2009
    St. Louis/Missouri
    The government has no business dictating pay or bonuses to any privately owned company. I do not care how much any privately owned company pays it's employees or how large their bonuses are. However they should succeed or fail on their own. The government should not bail out anyone or any company. Capitalism is very effective, the winners succeed and the losers go out of business. And NO company is to big to fail.
    Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same. - Ronald Reagan

  4. #3
    Join Date
    Nov 2008
    Toronto, Ohio
    Blog Entries
    "Dinner with the Messiah"

    Once upon a time, I was invited to the White House for a private dinner with the President. I am a respected businessman, with a factory that produces memory chips for computers and portable electronics. There was some talk that my industry was being scrutinized by the administration, but I paid it no mind. I live in a free country. There's nothing that the government can do to me if I've broken no laws. My wealth was earned honestly, and an invitation to dinner with an American President is an honor.

    I checked my coat, was greeted by the Chief of Staff, and joined the President in a yellow dining room.

    We sat across from each other at a table draped in white linen. The Great Seal was embossed on the china. Uniformed staff served our dinner.

    The meal was served, and I was startled when my waiter suddenly reached out, plucked a dinner roll off my plate, and began nibbling it as he walked back to the kitchen.

    Sorry about that," said the President. "Andrew is very hungry."

    "I don't appreciate..." I began, but as I looked into the calm brown eyes across from me, I felt immediately guilty and petty.. It was just a dinner roll.

    "Of course," I concluded, and reached for my glass. Before I could, however, another waiter reached forward, took the glass away and swallowed the wine in a single gulp.

    "And his brother Eric is very thirsty." said the President.

    I didn't say anything. The President is testing my compassion, I thought. I will play along. I don't want to seem unkind.

    My plate was whisked away before I had tasted a bite.

    "Eric's children are also quite hungry."

    With a lurch, I crashed to the floor. My chair had been pulled out from under me. I stood,brushing myself off angrily, and watched as it was carried from the room.

    "And their grandmother can't stand for long."

    I excused myself, smiling outwardly, but inside feeling like a fool.

    Obviously I had been invited to the White House to be sport for some game. I reached for my coat, to find that it had been taken. I turned back to the President.

    "Their grandfather doesn't like the cold."

    I wanted to shout - that was my coat! But again, I looked at the placid smiling face of my host and decided I was being a poor sport. I spread my hands helplessly and chuckled. Then I felt my hip pocket and realized my wallet was gone. I excused myself and walked to a phone on an elegant side table. I learned shortly that my credit cards had been maxed out, my bank accounts emptied, my retirement and equity portfolios had vanished, and my wife had been thrown out of our home. Apparently, the waiters and their families were moving in. The President hadn't moved or spoken as I learned all this, but finally I lowered the phone into its cradle and turned to face him.

    "Andrew's whole family has made bad financial decisions. They haven't planned for retirement, and they need a house. They recently defaulted on a subprime mortgage. I told them they could have your home. They need it more than you do."

    My hands were shaking. I felt faint. I stumbled back to the table and knelt on the floor. The President cheerfully cut his meat, ate his steak and drank his wine.

    I lowered my eyes and stared at the small grey circles on the tablecloth that were water d rops.

    "By the way," He added, "I have just signed an Executive Order nationalizing your factories. I'm firing you as head of your business. I'll be operating the firm now for the benefit of all mankind.

    There's a whole bunch of Erics and Andrews out there and they can't come to you for jobs groveling like beggars."

    I looked up. The President dropped his spoon into the empty ramekin which had been his creme brulee. He drained the last drops of his wine.

    As the table was cleared, he lit a cigarette and leaned back in his chair. He stared at me. I clung to the edge of the table as if it were a ledge and I were a man hanging over an abyss. I thought of the years behind me, of the life I had lived. The life I had earned with a lifetime of work, risk and struggle. Why was I punished? How had I allowed it to be taken? What game had I played and lost? I looked across the table and noticed with some surprise that there was no game board between us.

    What had I done wrong?

    As if answering the unspoken thought, the President suddenly cocked his head, locked his empty eyes to mine, and bared a million teeth, chuckling wryly as he folded his hands.

    "You should have stopped me at the dinner roll," he said.

    Wake up, America !


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