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AmSpecBlog
The Fix for the Fix
The news that the administration will severely cut the pay of executives at some of the firms that got the most bailout money is, of course, terrible. This level of government activity in private affairs is truly frightening.
Then again, there is a good justification for it. These companies -- AIG, General Motors, Bank of America, etc. -- are only nominally private companies, if even that. They are being propped up with public funds, so shouldn't their compensation be determined by the government? You could see this problem down the road as soon as the government bailed these companies out to fix the financial crisis.
The immediate problem is that the executives at these firms, whose pay is being cut by an average of 90 percent, have no reason to stick around. Why would they suffer the low wages and contempt show to them to stay when they could bolt for another company and keep 100 percent of their earnings?
Probably the administration has a fix in mind for that eventuality as well. Because they have a fix for every problem created by their previous fixes.
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c. j. acworth| 10.21.09 @ 6:42PM
Sorry, but I have no sympathy for these guys (or gals). If they are going to plead that they are "Too big to fail" and so are somehow entitled to taxpayer bailout, then I want them to not only lose bonuses and big paychecks, I want to see them walking barefoot in the streets in sackcloth and ashes. I want all of corporate America to see what happens when you take Ceasar's coin and be so horrified by it that they determine never to need to dip into the public till themselves. As for the firms that took the bailout and may now lose needed talent, I say good. Let them fail like they should've done at the start.
Aaron| 10.21.09 @ 7:29PM
The government that grows so powerful that can give everything, can take everything away.... Hmmmm, I think we have gotten to that point. No one, no matter how mad that you may be at these organizations, can justify the legality of our government telling these private American owned businesses how much or how little they can pay their employees. How are we letting this happen? We the people have become we the fools enslaved to the District of Columbia. We are duped into a sense of empowerment at election time thinking that we elect representatives, the reality is that they are our masters. What a lot they are as well, liars, thieves, cheats, adulterers, shakedown artists, racists, homosexuals, traitors, atheists, etc, etc, etc.
Tony Hollowell| 10.21.09 @ 11:15PM
Everybody loses in this one: the CEO's, the company (has to settle for a lame-o CEO who will work for $90,000/year), and the american people (does anybody honestly think we are going to get a return on our investment in these sinking ships?)
Non-CEO| 10.22.09 @ 12:12AM
Actually, the obvious question here is: why didn't they quit while they were ahead? They'd reaped huge bonuses for themselves while running their companies into the ground, so why didn't they just take their money and go?
Roy| 10.22.09 @ 2:11AM
Non-CEO: Who knows? However, you can be happy about one thing: They sure will now.
The companies are not the ones who are at fault for being declared "too big to fail". Who is at fault is the government. If the government hurls fat wads of cash out of a helicopter, of course I am going to pick it up and I am not going to walk around in sackcloth and ashes afterwards. Who should be doing so is Democrats belonging to the Democrat party who passed Democrat bailouts of Democrat unions to keep Democrat campaign contributions coming. And Republicans who caved in to them.
Martin Owens| 10.22.09 @ 5:38AM
All too many of these " executives" are only good at currying government favor anyway. And what is the argument for paying them big money and bonuses besides? That they need to reward " talent and ability". Huh? What talents or abilities were on display when this crew steered us all straight into the iceberg?
Dean| 10.22.09 @ 8:34AM
For years, executive compensation has been completely out of control and elected boards have essentially been rubber stamps for the outlandish pay. And, the greed in corporate America should be considered shameful by conservatives. In too many cases, corporate leaders were showing marginal results, but were getting tens of millions of dollars in annual compensation with salary, bonus and perks. Executives were driving companies into the ground, would finally get fired and then walk away with huge golden parchutes.
Conservativism stands for being rewarded for the results of your hard work, not for showing up on time. Executive pay in America today is being handed out like trophies are handed out to every kid in little league. This mentality that believes success is not important, but participation is what counts is crazy.
That being said, the government stepping in to decide how much a company can pay their employees (including executives) is significantly worse. This is an over reach by the Obama administration and simply a precursor of what is to come for everyone at all pay levels. If they can go and set pay levels for the most powerful in America, don't believe for a second they can't do the same thing to the rest of us.
We should all be outraged by this.
louis tully| 10.22.09 @ 10:29AM
I'm a free enterprise guy, and a knee-jerk anti-socialist. Therefore I completely agree with c. j. acworth, comment 1 above.
Climbing into bed with Uncle Socialist has obvious, forseen and disasterous consequences. I don't propose to bail the exec.s out from their precious bailouts.
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