For all of Obama’s posturing over the past 3 years that he is for the little-guy, surely he would stand up for the Main Street he so loves as big banks showered 1.6 Billion in “lavish compensation” on the top executives. Surely he would rake back the massive benefits package to the same company chiefs he decried as the “bad actors” of the financial system meltdown. Send in the Pay Czar (sound of Wagner’s “Ride of the Valkyries” in the background)
Time Magazine reported that on October 21st 2009 pay (and oil) czar Ken Feinberg announced “the Treasury Department will slash compensation for the 25 highest-paid executives at the seven firms that received the largest chunks of federal bailout money: Citigroup, Bank of America, AIG, General Motors, Chrysler and the financing arms of the two automakers. Salaries are expected to shrink 50% on average…”
“He said such a fight could have exposed banks to lawsuits from shareholders trying to recapture the executives’ money. Feinberg said his public shaming of the 17 banks was sufficient.” Well, we certainly want to protect these banks… …and our good friends and donors.
Bottom line is there should be no Ken Feinberg, no bank czar, no TARP, no bank bailout, and no government involvement in the pay packages of any company in the U.S. — large or small. Government’s involvement is to make sure the playing field is fair, and then let the players play. If one does better than the others, then so be it. Then, consumers, based on transparency, can decide whether they want to invest in the bank or use the services of the bank. If I see a bank that doesn’t pay its executives huge bonuses, maybe I’ll decide to invest there. Then, guess what, the free market will cause the other banks to lower their executive bonuses.
Once again government tries to repeal the law of supply and demand when the market would allow that game to be won by the consumers!