Salary cap for execs of bailed out companies
locallyunscene
Feeder of Trolls Join Date: 2002-12-25 Member: 11528Members, Constellation
Feeder of Trolls Join Date: 2002-12-25 Member: 11528Members, Constellation
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<div class="IPBDescription">common sense or ameri(k)an socialism?</div><a href="http://www.reuters.com/article/managementIssues/idUSN046231420090204" target="_blank">This</a>, in my opinion, is huge. "The People" want accountability on Wall St. and they want to know where their money is going. However, I doubt Obama will ever live this move down. I think it's a bit of a no-brainer, if your company failed miserably and had to be bailed out by taxpayer money you're not getting a fat bonus this year. However, putting a salary cap on a private enterprise is one of those things I never thought I'd see here.
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I don't see how they can complain? They still were getting paid/bonuses that were outrageous even after they got money. If they want the handouts, they need to deal with any rules they come with. Unfortunately, the money was initially handed out with basically no rules, which just let them continue their same act which caused this problem. Thankfully they are catching on some stipulations need to be added.
The gesture is for the common man who wants "hope" and "change". But the fact that it is being perpetrated by political leaders on both sides of the salary argument reveals their snide contempt for the populace. They know people are too stupid to realize that salaries are essentially inconsequential for these individuals.
But I agree with locallyunscene; salary caps on private enterprises are no good. But will they really be "private" after receiving bailouts? It's kind of like when you live in your parents' house and they give you an allowance and feed you, etc, and then they say "you're under my roof, you'll live by my rules", and they can do this, because when someone is dependent on you, you get power over them. Same thing here. The natiosociocommunofascialization of any industry does not bode well.
Obama admits "In order to restore our financial system, we've got to restore trust." And to do this, it's gonna involve a little bit of deception. Goes with the territory. Maybe "W" can offer him consulting for $10M an hour.
What.
Well, explaining it to everyone isn't feasible, and <i>not</i> doing it would also be a gesture, albeit of a different sort..
<!--quoteo(post=1699487:date=Feb 4 2009, 06:18 PM:name=lolfighter)--><div class='quotetop'>QUOTE(lolfighter @ Feb 4 2009, 06:18 PM) <a href="index.php?act=findpost&pid=1699487"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->What.<!--QuoteEnd--></div><!--QuoteEEnd-->
What the U.S. is doing has been called "nationalizing". As in "nationalizing the auto industry". Some have criticized it and are calling it "socializing". But really, there's no reason to pick on socialism in particular, because in the end, it's about who controls the industry. At the end of this it will be the government who controls the industries. Or the other way around, however you want to look at it. My point is that socialism, fascism, and communism are all the same when it comes to control; the government has the control. These systems only differ in "ownership" (which loses relevance without property rights, that is, loss of control), or in the philosophy of the purpose of control. So it doesn't matter whether it is called "nationalization", "socialization", or "natiosociocommunofascialization".
I happen to prefer the longer term, because in socialism or communism ownership is "public", and in fascism ownership is "private", but with the "nationalization" it's going to be a hybrid. So all the preceding contributing ideologies should get some credit.
(edit: pls excuse any perceived tone of pedantry, I'm sure you know whatever, just want to be thorough)
Of course, "tax payer money" is almost as meaningless as "executive salary cap."
No number of tax payments are going to account for the obscene amount of money being thrown down on the table here, not in 20 years, at least. By then, no one will be able to remember who owes who, either because everything's better and we don't care, or everything's worse and we... eh... don't care. I don't think even the most solid understanding of economic principles will allow this mess to be sorted out.
So, is it really tax payer money? Or, is it a heap of paper imbued with some ethereal meaning that everyone is supposed to respect? What tax payers should be outraged about is that even though the government is going to be taking away more of their magic paper now, it's not going to help pay down this bail out at all. It basically amounts to highway robbery if you ask me.
Companies that are begging for bailouts are from now essentially going to be meeting with restrictions on executive salaries.
I honestly dont see the problem with this. In a proper capitalistic system, the government would simply stand aside and let the company collapse, consequences be damned. Bailing the company out of the problem and thereby socialising the loss is however not out and out socialism per se. If it were then we would also be reaping the profits of said companies in times of plenty, and I dont see any hint of that within the scope of the article provided.
If the government were however to impose the salary cap on businesses that <i>are not</i> begging for bailouts and are weathering the economic turbulence with some degree of resilience, then indeed there would be a problem as this would be direct interference in the private sector and the hallmarks of the socialisation of government and the private sector.
The way I see it CEO's should be no different from average joes when it comes down to it. If a person like myself fails to do his job properly it can result in docking of pay or firing. CEO's on the other hand can succeed or fail and still get a fat bonus and a golden handshake at the end of the day and still reap a monster of a salary.
Success should be rewarded. Failure should be punished. If it works for the employees, why should it not work for the employers?
The way to properly punish these people would be to destroy their reputations, because like juice said, that's what they live off. Have the appropriate reputations been destroyed? In the appropriate social circles? I can't tell, but I wouldn't want to bet on it.
Capitalism doesn't have to be laissez-faire.
<!--quoteo(post=1699549:date=Feb 5 2009, 12:22 PM:name=lolfighter)--><div class='quotetop'>QUOTE(lolfighter @ Feb 5 2009, 12:22 PM) <a href="index.php?act=findpost&pid=1699549"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->I agree in principle, but like juice says, the salary is more of an "income on the side." Unlike the rest of us, they don't live off their salary, so this is a rather small slap on the wrist. Hell, slap on the wrist? 500k U.S. dollars is more than some people see in a decade.
The way to properly punish these people would be to destroy their reputations, because like juice said, that's what they live off. Have the appropriate reputations been destroyed? In the appropriate social circles? I can't tell, but I wouldn't want to bet on it.<!--QuoteEnd--></div><!--QuoteEEnd-->
I agree in principal, but I don't want the gov't getting in the business of destroying people's reputations. Theoretically the fact they drove a company into the ground and caused a major banking collapse should be enough to prevent a lot of "income on the side". If people still want to talk to them you can't really regulate that.
The problem, once again, is that the people most responsible are also the people least affected, and therefore the people least likely to care or learn from past mistakes.
the republicans love to beat the free enterprise drum, yet we have these bailouts that cost more than the iraq war, ww11, vietnam, the new deal, the space race etc combined
The way to properly punish these people would be to destroy their reputations, because like juice said, that's what they live off. Have the appropriate reputations been destroyed? In the appropriate social circles? I can't tell, but I wouldn't want to bet on it.<!--QuoteEnd--></div><!--QuoteEEnd-->
Just FYI, this is about their bonuses as well and yes most CEOs and Executives make their money off of their bonus. Also the 500k is not give in cash it is given in stock within their company which can only be cashed after the loans have been payed off. Only the CEOs who were actually with their company from the beginning get most of their money from stock and other areas.
Anyone see what some of these CEOs got last year. CNN showed a report that had 6 or 7 CEOs who’s company received TARP funds had bonuses of greater than 20 million and even 1 asshat who gave himself 80 million.
So yes this decision means a lot to many people.
I know that if my company does poorly I don’t get that great of a raise no mater how good of a job I've done.
The reason I don’t consider it socialism is that if you want your bonus back pay off your loan and feel free to give yourself as much money as you please. Most loans usually come with mandates just like you can’t get a car loan without insuring the car.
I think the part about the government giving them $Billions is why it is attacked as socialism... not so much the stipulations attached to the money. But that doesn't help, either.
It's easy to think of bonuses like a "tip" and salaries like the "paycheck", even if they're paid in equity or options. They're both official pay. So, yeah, you could address bonuses too (And that is being discussed - "those outrageous CEO bonuses and perks" were attacked even before Obama took office). But you're talking about CEOs of the largest and most powerful companies on the planet, and when you get to this level of the game, your primary incentive is not what you are "paid" [gasp]. (Except for the morons who give themselves a naked $80M out in the open.)
I guarantee you the former CEO of Goldman Sachs would have been very satisfied with ZERO bonus and ZERO salary. Because of his position, he later became Secretary of the Treasury. Yep, Hank Paulson, creator of last year's bailouts. I wonder if his old buddies at GS will find some way to thank him for sending them billions upon billions of dollars in bailout money. Just a thought.
Bonuses and Salaries are chump change when executives own enough stock in a company to put away tens or hundreds of million on a point or two change in price.
How this happening in a country where military keynianism and state capitalism has been the order since the mid 50s could surprise anyone is shocking in itself.
Bonuses and Salaries are chump change when executives own enough stock in a company to put away tens or hundreds of million on a point or two change in price.<!--QuoteEnd--></div><!--QuoteEEnd--> (My emphasis)
No doubt options mean a lot in good times, but you would think executives would care more for their normal wages in times like these. As profitable options and etc. can be, it seems a bit exaggerated.
And self-interest trumphs ideology. You see how the US and EU risk going all protectionist (e.g. "buy american") as soon as it serves them best. You could also see this change back-and-forwards between mercantilism and capitalism in the times of european colonies. You could call it just being pragmatic, though.