This, from Financial Week's website, my less conservative friends might say, doesn't:
Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance
-House Financial Services Committee Chairman Barney Frank.
When he says this, on the other hand, it should scare even them:
"the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies."
All?
This sets off the weevils in my conspiracy theory sub-brain and now I'm scared.
06 February 2009
How do you spell fear?
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5 comments:
I don't have a problem with restricting the huge executive bonuses to financial institution brought back from the brink of bankruptcy by the bailout. My reasons are likely very similar to those you have heard several times, before. Restricting those from all companies, not just finance companies involved in the bailout seems to be among the first steps of fascism.
If a business doesn't ask for government assistance, I don't see how the government should have any say in how they handle their money, once their legal obligation to their employees is satisfied. Sure, pocketing a multimillion dollar bonus right after laying off thousands of people is kind of sleazy, but that's a PR issue for the company in question.
Sure, that's how I felt when I first heard the news. Then I read this article, where David Harsanyi points out, "nearly every sector of the economy will, at one point, allegedly have benefited from [this] taxpayer bounty.", due to the broadness of the spending in question. Which begs the question, "Does this mean that all industries can be subjected to similar central control?".
Wow, this comment became longer than many of my regular posts. Apologies for the abrupt ending. I saw that I had started repeating myself, and wasn't sure how to end gracefully.
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Perhaps. If a company elects to benefit from a bailout program, it doesn't seem unreasonable to me for the government to impose some degree of restrictions on how that money is used.
Whether or not the government should be propping up businesses who are on the brink of failure due their own own mismanagement is another issue entirely.
Attempting to stimulate the economy by lending critical businesses short-term operating capital is one thing. Propping up an entire industry speaks of mismanagement at several levels: Operational, oversight, just about everything.
I could be wrong on this, but it seems to me that this whole thing started with a confluence of bad choices by lenders, exacerbated by bad-credit borrowers doing what bad-credit borrowers tend to do in order to become bad-credit borrowers. All the while, government oversight was ignoring the situation because the short term results seemed promising.
It seems to me that:
1) The government screwed up by not paying close enough attention to the operations of a critical node of the global economy.
2) The financial sector screwed up by getting greedy and shopping around high-risk loans that ended up in default.
3) The public screwed up by operating in a very predictable manner. Taking advantage of programs that were ostensibly intended to provide opportunity to start homes and businesses, and dropping the ball on their own responsibility.
Businesses not involved in the financial collapse may need short-term help weathering the storm or the current economic situation. As I said, it doesn't seem unreasonable to impose some sort of spending regulation on those companies that obtain bailout support. If a company simply receives a sort of indirect windfall from the bailout program, well, they were just positioned in the right place at the right time. I don't see why they should be restricted in their operation in any way.
And if my information is wrong on any of the points above, please let me know. I haven't had the time to follow current events, no matter how important, that I would like. I could be making incorrect assumptions based on second-hand information and opinions.
"making incorrect assumptions based on second-hand information and opinions." is what everyone is doing.
The only note I would make is that the ideas you've heard actually have the government manipulating the situation, forcing the bad loans on the banks with legislation, rather than being merely oblivious.
That said, some economists are claiming the bad loans as a root cause are a fairy tale.
Still reading, here, but it's hard because the more I hear the more pissed I get. And the more pissed I get the more impotent I feel to do anything about it.
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