Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley all joined this program. Look where most of them are now.

Basically I think it is bad policy to limit executive pay. What if one of these companies that received bailout funds wanted to go out and hire a Jack Welch or Michael Eisner type of executive to turn their company around? What could they say: “Hey, we would like to hire you to turn around our struggling company. How does $500,000 sound?” It would sound like a joke.

It’s kind of like when the automakers were asking for bailout money and Chuck Schumer came out and said “These companies have got to understand that their business model based on the gasoline engine is unacceptable”. Unacceptable to whom? The millions of people every year who provide a demand for all of those gasoline fueled cars. They seem to think it’s acceptable. No, it means it’s unacceptable to Chuck Schumer. Now, luckily, he didn’t get his way on that. YET. But the more government intrudes into the private sector the more they call the shots on what is produced. The less choice we have as consumers because we have ceded our decision-making ability to our “betters” in Washington.

What a CEO makes is determined by the board of directors. The board of directors is elected by the shareholders. If you are a shareholder and you don’t like the BOD giving huge bonuses to the CEO then vote the bastards out. What does government have to do with it?

That is why conservatives must fight every bailout. Let the companies go bankrupt. It’s called “creative destruction” and it frees up labor and capital to be used more efficiently elsewhere in the economy. Every time they get propped up with a bailout, what we are saying is that we’ll foot the bill for the companies incompetence, inefficiencies and bad decision-making. Stop the insanity.

The people who are “to blame” are the people who contributed to and profited from the overvaluation of real estate and who were unwilling to apply the same stringent standards banks had applied to communities of color during the expansions in the CRA act. Please read Bernanke’s piece, it’s illuminating.

DeathToMediaHacks on February 4, 2009 at 2:28 PM

Ah, in defending the CRA you conveniently forget to address the bigger part of the problem, which was the social engineers in congress mandating that Fannie Mae and Freddie Mac lower their standards for the types of loans they could buy. This wasn’t part of the CRA, but it was even more damaging. They did this at the behest of lobbying efforts by community organizing groups so that the poor (yes, the damned poor again) could obtain “affordable housing”. This effectively removed the risk of subprime lending for the lending institutions and created a market for bad loans.

Now, DTMH, here is a question. What acts as the biggest brake on greed? I’m sure you probably think thousands of more pages of regulations will curb greed. But, in reality, the biggest brake on greed is risk. RISK. Well, Fannie and Freddie took that brake away. So, the reason these lending institutions didn’t apply the same “stringent standards” (laughable) is because there was no downside to making bad loans when Fannie and Freddie would buy them from you.

Or, do you really believe that after decades and decades of assessing risk and analyzing credit scores, income and requiring down payments that, all of a sudden, one day the banks decided to chuck those standards out the window due to a sudden surge of (wait for it…wait for it)…greed?

See, our system works on risk/reward. Take the risk part out and all you are left with is reward. Greed wins the day.

So, the people who are to blame for this are the social engineers in Congress who interfered in the mortgage market in order to provide “affordable housing”. You don’t have to take my word for it either, you can look up the C-SPAN clips on youtube and see Barney Frank, Maxine Waters and other Democrats in utter indignation at the very thought that Fannie Mae needed to be reined in for fear of what it would do to access to “affordable housing”. And by affordable housing, I kind of think they’re talking about housing for the “poor”. Not really the fault of the poor as much as the fault of the Do-Gooders advocating on their behalf and the half-wits in congress who thought it made sense.

So, defend the CRA if you must. It was bad, strong-arm policy that contributed to the mortgage mess. The fear of CRA complaints being filed on one end and the removal of risk by Fannie and Freddie on the other end set up the perfect incentive for banks to issue as many subprime loans as they could.

And Fannie and Freddie were turning right around and selling them on wall street to financial firms that over-leveraged mightily to get a piece of the hot real-estate action. That is what we might call a Domino Effect.

This is America, we don’t disparage wealth. … What gets people upset, and rightfully so, is executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers,” he said.

Executives being rewarded for failure. Wow, Obama would never reward executives who ran their companies into the ground and walked away with millions. You know, he would never employ greedy executives like, oh I don’t know, James Johnson, Jamie Gorelick or Franklin Raines.

With Obama there is always (ALWAYS) a “do as I say, not as I do” hypocrisy. I think Obama should go out in front of the cameras and demand that Johnson, Gorelick and Raines give back all of the millions they made at Fannie Mae except, of course, for $500,000. And, yes, that money came at the expense of the American taxpayer who got stuck with Fannie Mae’s huge tab.

There’s that darn double standard thing again. If you are a greedy bastard executive who ruined your company and made off with millions you are “shameful”. If you are a greedy bastard executive who ruined your company and made off with millions but you happen to support Obama’s candidacy you get rewarded with a job. Message received, Mr. President.

Is there a reason why Obama cranks his head from left to right and back again when delivering that dreamy oratory? He looks like a robot. Can’t he look directly ahead?

If they don’t want the pay cut,, don’t take the money!!!

JellyToast on February 4, 2009 at 6:43 PM

-
What if they had a bailout and nobody showed up?

I’m looking for trades. What are you doing other than posting on your employer’s time?

Cody1991 on February 4, 2009 at 3:51 PM

So much, apparently, that I’m not responding to you in a timely enough manner, please let me put down what I’m doing so I can get back to you.

As an answer to what you should do as a day trader. I haven’t a clue, I’m not a day trader and I didn’t choose to hitch my sales to such a potentially vulnerable and volatile industry, you got the profits when it was good guess you’ll be dealing with the downturn now. Now, here’s a question, did Bush give you reccomendations on which stocks to trade day in and day out outside of signing laws that subsidized corporations? I’m not sure why you’re looking to Obama to plan wall street’s every move…aren’t you supposed to be trained in that as a day trader. Obama is setting economic policy however and wthin those parameters you’ll make some investments. Good luck!

Um Mr. Hacky Sack, I’m not blaming any poor people. I’m blaming the government.

MobileVideoEngineer on February 4, 2009 at 2:29 PM

Ha! now that was funny. :) When people blame the CRA they are basically blaming poor people in my experience, they just use the government as their foil. When, as you can see from my post, poor communities where dotting their i’s and crossing the ts.

DeathToMediaHacks on February 4, 2009 at 2:32 PM

That is some high-grade hack reasoning. If you don’t like the way the government required businesses to make bad loans to poor people who couldn’t afford them, it’s really because you just hate poor people?

The whole mess was caused by the govt ignoring sound business and first demanding that banks make bad loans, then buying the bad loans from the banks so they could make more. The whole idea of capping compensation is to scapegoat businesses. It’s basic demagoguery.

Kinda like accusing people of hating poor people who don’t agree with some govt program. But who would do a thing like that?

If they are being propped up by Federal money doesn’t that make the Prez the defacto CEO? It’s not fascism to demand some control over your investment, any investor demands that. ….
DeathToMediaHacks on February 4, 2009 at 2:30 PM

If the president is the defacto CEO, isn’t it already fascism? You seem to be proving the very point you’re arguing.

Let’s cut that person’s salary.

If they are being propped up by Federal money doesn’t that make the Prez the defacto CEO?
DeathToMediaHacks on February 4, 2009 at 2:30 PM

No, it makes the AMERICAN PEOPLE a shareholder. It is truly insane to go off and tell a company to be successful but hamstring the Board of Directors about things like compensation.

Next thing you know, filthy bastard’s administration will be mandating that any company who takes federal money must hire union employees, buy exclusively American for products and services, purchase global warming credits, etc.

WHY?

Because the GAG messiah in his so called wisdom
has just told wall street
you cant make any more money if you touch any government funds..

OK so all of wall street knows the only good execs left
will probably jump ship and BAIL..

I am not defending these ceos..
But the unintended consequences of
NOT thinking something through

Apparently hasnt dawned yet on the moron in the white house..

sheesh he is doing more damage to the economy than
the terrorists could have ever dreamed..

If one dances to the socialist music one must pay the socialist piper.

MB4 on February 4, 2009 at 2:30 PM

Ahhh… but in Socialist Amerika the Government Pays the Piper under a grant to the National Endowment for the Arts put into a Stimulus Bill!

Imposing regulations on welfare mothers who take bailouts: Bad (Possibly Racist)

Imposing regulations on schools that take bailouts: Bad (Possibly Racist)

Imposing regulations on farmers who take bailouts: Bad (Possibly Racist)

Imposing regulations on foreign nations that take bailouts: Bad (Possibly Racist)

Imposing regulations on CEOs who take bailouts: Good

I’ll collect your workbooks later for star stickers and purple-inked esteem enhancers.