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It Is Time To Overthrow The Pay Czar
The mere fact that "special masters" are even labeled "Czars" by the administration should be warning enough. One might guess either that the leaders of the administration have a very poor grasp of the historical import and meaning of the term, or they have the unabashed arrogance to wield it notwithstanding its many negative and authoritarian connotations. Not that the Obama administration is alone in its use of the term, but it has now exceeded the high water mark for Czar populations set by the Bush Administration. That we now have one in the process of dictating executive pay, indeed any compensation structure at all, is deeply concerning. So when Obama administration’s "Special Master for Executive Compensation" out and dictates that his Papal Bull on pay cuts for executives of banks receiving government assistance should become the model for Wall Street and for the United States generally, well:
1. Despite the protestations nearly since January that no one in the Obama administration would be meddling with compensation in private enterprise, you should have seen this coming months ago.
2. We told you so.
We think it painfully congruent that Czar Nicholas Feinberg II comes hot off the throne of another Czarist dais to his present exultation. More appropriate still that he brings his experience from the 9/11 victims fund to his present post. "I am extremely sensitive to the public outrage," he quipped to Bloomberg. Excellent. We are most pleased, Your Imperial Majesty, that it is you, given your sensitivity, pulling the levers on the longer-term variables in this complex system.
The fact is, much as the public may yearn to cut bankers down to size, and much as getting at someone's cash is, after all, the most vicious and ghastly punishment there is in the United States, this will all end in tears. The proper way to have dealt with executive pay (which is a tiny fraction of corporate cost in any event) would have been to permit these institutions to fail. Period. You might notice that no one needs to modify Dick Fuld's pay today.
Citizens of the United States do not need a "special master" to deliver them a spanking for losing money. Nor do they need a handout from government coffers. It's time for enterprise in the United States to leave the nest and forgo both the extra bedroom that Mom will keep just like you left it "in case," and the time out room Dad will send you to if you blow it again. Punishing firms that accepted government funds, effectively under duress, and who have managed to actually pay those funds back (at a gain to the taxpayer, you might also notice) is a dangerous act. It is a clear sign that political whim and "sensitivity to public outrage" is driving economic policy. Again, this will all end in tears.
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We forgot about that, over the last two years unprecedented things have happened.
We are so fucked, we forgot how fucked we are.
Hahaha...right on ghostface...just brilliant!
+100
It's hard to feel too bad under the circumstances. You dance with who brung ya! Pretty soon we'll all be on a GS schedule or riding around scrounging for water and gasoline while wearing assless chaps.
+100 for using the term "assless chaps". Excellent, they could make a difference for me as I get humped by the market every day.
Since they didn't let them fail they're wards of the state as far as I'm concerned. I don't give a rip about the "slippery slope" argument. It should go down a lot further than the top 25 at each company. Tell them every bonus for those below the top 25 requires a matching contribution to the taxpayers.
Grade them along the government scale and pay accordingly.
Same goes for Fannie and Freddie, who somehow seemed to have slipped out of these restrictions, I guess since they didn't take TARP money.
+1 ROTFLMAO
This post is fail. At least you categorized it correctly.
I love your specificity!
These are not czars. they are Satlinist communist Operatchiks. The totalitarian ruthless functionaries that control the People. studt Stalin; you will understand obama well.
Stalin, or Hitler, or the master of them all, Mussolini.
That is why I think this is amusing in a way. These stupid bankers thought they would get away with a free handout.
They really should have studied a bit more history in school.
I hope you are right but I think they already got their payout, and they will be rewarded in the future by more "stimulus" or "green" or "social" government spending.
BARKY’S FIRST CHOICES: NO SEAT AT THE TABLE
FOR LABOR AND THE THIRD WORLD
Obama’s first appointments have confirmed the grimmest suspicions about the new regime. The naming of the vicious thug Rahm Emanuel as the new Martin Bormann of the regime has caused much consternation, even among the netroots or nutroots crowd over at the Daily Kos. Rahm is a former member of the Israeli Defense Force whose ruling passion is that he is a warmonger. In 2006, when Rahm ran
the Democratic congressional money machine, he made sure that only warmongers
committed to the open-ended prosecution of the Afghan and Iraq wars could get any
Democratic Party financing for their races. Many contests were lost as a result. A tragic
case was that of grass-roots antiwar activist Christine Cegelis of Ohio, who was defeated
in the Democratic primary by Tammy Duckworth, an Iraq war veteran who advocated
endless hostilities there. Duckworth lost to the Republican by several points. If the
$300,000 Rahm gave Duckworth had been shared with anti-war candidate Bob Bowen in
Florida, a Democratic seat could easily have been added. Rahm is also a product of the
filthy and corrupt Illinois bipartisan Combine, which I have described in my books.
A co-chair of the transition team is Valerie Jarrett, who served as Barky’s travelling
schoolmarm during the campaign. Jarrett also comes from the Daley wing of the Illinois
combine. She has provided graft and related support for Michelle Obama’s foundationfunded
operations. Jarrett is also an integral part of the Chicago housing graft community, a region also inhabited by Barky’s original godfather, the convicted felon and thief Tony Rezko. Jarrett is discussed in detail in my Obama biography. She is joined on the transition team by John Podesta, a Clinton-era retread who worked for Sen. Tom Daschle, the senator from Citibank, the biggest employer in South Dakota. Podesta also worked for Sen. Patrick Leahy of Vermont, a close personal friend of Weatherman terrorist bombers Bill Ayers and Bernardine Dohrn. Another Daschle-Citibank retread is transition co-chair Tom Rouse, who was the chief of staff for Daschle when he was the weakest Democratic majority leader in recent memory,
surrendering to Bush on point after point. Chief strategist remains David Axelrod of the
corrupt Illinois Combine, who was taught his mindbending skills in the infamous “1313”
Rockefeller-funded think tank at the University of Chicago.
BANKERS ONLY: NO VOICE FOR LABOR, RETIREES, SMALL BUSINESS,
WOMEN
Obama’s transitional council of economic advisers is also notable. The dominant figures
here are all Wall Street derivatives merchants and their quackademic apologists and
politician clients. The key people here are plutocrat Warren Buffet, Obama moneybags
and Hyatt heiress Penny Pritzker, Goldman Sachs-Citibank alum Robert Rubin, womanhating
thug and failed Harvard president Larry Summers, Google spook Eric Schmidt,
and Roger Ferguson, the former vice president of the Federal Reserve board. The most
obscene is Trilateral Commission bigwig Paul Adolf Volcker, the bringer of the 22%
prime rate of 1981 and the destroyer of the US industrial base. What is truly notable
about this list is that there is not one single labor leader. No Sweeney of the AFL-CIO, no
Hoffa of the Teamsters, no UAW, not even the unsavory Andy Stern of the SIEU. Note
the difference to the New Deal, when labor reps were indispensable. With Barky, only
derivatives monsters need apply. Also notable by their absence are leaders of women’s
groups, small business associations, the congressional black caucus, retirees groups like
the AARP – there is not even a token face representing any of these groups, all of which
have a vital interest in economic policy. Read the ill omens if you have eyes to see. The
Obama regime is shaping up as of the bankers, by the bankers, for the bankers. This is not
the FDR New Deal – this is the Mussolini fascist corporate state.
WASHINGTON ECONOMIC CONFERENCE: THE DERIVATIVES BLOC VS. THE
ANTI-DERIVATIVES BLOC
We are also told that Barky has been on the phone to foreign leaders about matters of
economic. Let us read the tea leaves: whom did Barky call? Here is the list: Australia, the
British, Canada, France, Germany, Israel, Japan, Mexico, and South Korea.
Notice now who is NOT on the list. Start with the great world powers who have been
snubbed: Russia and China, both of whom are bigger holders of US Treasury bonds than
most of those who are on the list. Saudi Arabia, who might have needed reassurance that
Barky is not a commie, are also snubbed. Forget ideology, and behold the ineptitude.
Most glaring of all is the lack of any phone call to a leading third world or developing
sector country, other than Mexico, which is a branch of NAFTA. No calls were made to
Brazil, Argentina, South Africa, Nigeria, Algeria, India or a long list of other leading
states. Nobody in Africa, nobody in south Asia, and nobody in South America got a call.
Not even those who will be coming to the pseudo-Bretton Woods conference set for
Washington later this month. The best we can hope for regarding that conference is that it
end in a stalemate, dividing the world between a US-UK dominated derivatives bloc and
a Brazil-India-Russia-China-South Africa anti-derivatives bloc interested in real physical
commodity production, not fictitious capital. Obama, in summation, is acting just like the abject puppet of the Wall Street derivatives merchants and warmongers which we have argued him to be.
I propose that all the incensed "top talent" at these banks storm right out the door to teach us a lesson!
Surely, banking itself will grind to a halt and the very foundations of our nation will crumble if the "top talent" at these banks takes leave. To think they would be compensated at a mere 20 times the average income rather than 50 times!
For shame, America! Has this really become a nation where someone who spends his day shuffling around the money of his more productive countrymen from one spreadsheet to another, can't even make enough money to provide a third vacation house to his family? Is this really what we've become?
+1
Let's see if we can get the doors rigged to hit them in the ass on the way out first!
Any "profits" should not go to bonuses until the gaping hole of shit that was pushed on the taxpayer is back-filled. This is not public outrage, but COMMON FRICKEN SENSE!! It's that simple.
(Dear lord, leave the East Coast for a day...and I don't mean go to San Francisco.)
I think the pay-czar argument is perfect misdirection.(that is not aimed at you,Marla..it is aimed at the villains who created the "pay czar".First of all, we should have let the disasters fail.Then we should have looked into the vast web of criminal activities that precipitated the disaster.By all rights, we should be enjoying a huge parade O felons right now, as we send the crooks to jail.The politicians know the people are angry so we get the cathartic and wrongheaded pay czar instead.A cheap easy means to placate the masses.
Here's a suggestion:Let's amp up the hard core prosecutions.I say we start at paulson and bernake and see where that leads.I would rather have spent the bailout cash on lavish prosecution.But that's just me.
Agreed. It must all start with an audit of the Fed. Ben and Hank must lead the perp walk. Timmy can hold up the rear.
Government involvement in most private pay scales is not a good thing. Controlling minimum wage rates should be a part of government. I do not believe that the government could win in court if a person sued for their contractual agreement for compensation-especially when it was approved by stockholders.
The post makes a good point. The government put a gun to the head of these institutions to force them to take the money. Now it is going to penalize the individuals who were entrusted not to lose it?
What the hell? Czars? The term as applied to non-cabinet government officials was invented by journalists in the 70s, not the Obama administration. Too, have you taken the time to consider how many czars were in the previous administration. This is just another Republican talking point.
Where was the outrage over Bush's thirty-some-odd czars -- for example, Assistant Secretary of Health and Human Services, Advisor to the President for Public Health Emercency Preparedness, otherwise known as the "bird flu czar"? Ooooooo, scary czar. Nevertheless, don't you think it is much easier to just say or write "bird flu czar" rather than the ungodly long title?
As for restricting executive pay for TARP recepients who haven't paid it back yet, perhaps this will speed up the process. The Obama administration, contrary to your claim, is not restricting the compensation of executives from private enterprises. Not only are the TARP recipients public enterprises, they our now partially, if not wholly, owned by the government, and thereby us the taxpayers.
What is more serious is Bernanke's announcement that the FED may step in to restrict executive compensation of any financial institution that engages in risky behaviour. And why the hell not? The FED after all, is also a regulator.
I'm sorry, but free and unfettered capitalism a la Ayn Rand and Alan Greenspan does not work. The free markets have not regulated themselves, as Greenspan himself admitted. (And for those who believe in creative destruction, at what price to the average American who would bear the brunt of the suffering?) Human nature dictates that we have laws and regulations, unless you believe we are all angels, or you prefer total anarchy.
Well said!
Some bozo flagged you as "junk", but I think you are spot on.
They key is to get involved in systemic risks, those that individual companies can not manage by themselves. By repealing glass steagall, they went all in on risk. I would also add that THEY HAVE TO ENFORCE THE LAWS ON THE BOOKS, if it seems like I am shouting it's because I am shouting.
This goes to show you how useless they are, they had a good thing put in place after the first great depression, and they eliminated it for greed and have caused a second great depression. We have enough laws, besides providing very important infrastructure and defense, they are irrelevant or downright dangerous. We need to add a constitutional ammendment to make corporations have rights that are somewhat less than the rights of a person (pierce the corporate veil) and make campaign lobbyists/contributions illegal. Public sponsored campaigns for three parties.
Give us a f-ing break. Having a centralized economy with a central bank fixing the interest rate (price) of our unbacked paper-ticket money with an omnipotent Federal Government is as far from "free and unfettered capitalism " as you can get.
You simply cannot "believe in the free market" and be a Fed Chairman. They are mutually exclusive. If AG had an ounce of real capitalism in him, he would have shut down the Fed on his first day.
Your post is an infantile L/R diatribe, and it's tired.
Is that you Steve Liesman?
Marla, I love you to death, but I'm going to have to disagree. albeit slightly.
First, imho, too big to fail was not only a financial reality due to evil counterparties, but the government, nay the country, did not have the actual, physical legal resources to take on AIG, BofA and Citi bankruptcies. IIRC, the largest bankruptcy before this latest meltdown was Continental Illinios. And that was a bump in the road compared to what was looming.
Second, it was (probably) imperative that European banks received the passthroughs that AIG facilitated after it's rescue. If I had to guess, the magnitude of European banks' losses were not exactly shared with the EU public.
Third, the administration knew that the issue of the auto comapnies was also coming. It couldn't afford the massive layoffs from the financial industry as well as Detroit. The country was going to be in great financial difficulty as it was.
Anyway, you get the idea of where I'm coming from.
Rock on.
"The proper way to have dealt with executive pay (which is a tiny fraction of corporate cost in any event)"
This is completely false, executive costs are 1/3 of toatal employee costs on average. Since 1/3 is on average the costs of employees to corporate costs, then that is executives take 1/6 of total corporate costs and that is not a tiny fraction.
Marla, you are watching glenn Beck too much, one of those executives that are going to be hurt by new legislation or just GOP cool-aid drinker (bling republican {not conservative} idealouge).
I do not know if i come out stupid by noting the fact that nickname Czar doesnt give them the power of real czars, which can be only one in any single country and that is a top dog.
Repost from above:
Actually, Goldman structured a bunch of restricted stock as bonuses last winter to deal with "public outrage." Now that is what the other companies will do, also. Now, instead of having to pay regular income tax, they will get long term capital gains....as they will surely have easy access to funds enabling them to buy their options and secure long term capital gain rates (along with bloated stock prices). This is not a bad thing for these douchebags.
On the Goldman note...now they are paying gigantic bonuses, as well. They are pretty much waving their untouchable status in everyone's faces at this point. These "companies" are actually following Goldman's model of senior exec. compensation that was set up last December...when, by the way, Goldman stock was trading at (drum roll, please) $80 per share on Dec.18, 2008. I'm guessing their little employee stock plans look preeetttty good right now.
Link to Goldman's compensation model ala Dec. 2008:
http://uk.reuters.com/article/idUKN1828036120081218
Ah...
Once in a while i drop into ZERO HEDGE...to see what the lunatics are thinking...still a bunch of rebels without a cause..they moan about Goldman Sachs in one breadth..while they curse at czars and cutting bankers pay in another..
Maria seems to revel in dropping buzz words like socialism...or feign ignorance about how we got to our present predicament...(republican administration...with wild wall street jubilation intervenes in markets...)..now everybody thinks its cool to blame OBAMA...
truth be told OBAMA would be reckless if he didnt do something about these pay packages...the last thing one needs in fragile times like this is another dose of populist outrage...it distracts from sensible Governance...
therein lies my gripe with the author of this piece...its too simplistic...what u should be pointing out is that perhaps OBAMA is trying to keep the masses at bay with this one...and discuss the pros and cons of such action...
u see i get the feeling that half the cats that post on these boards(especially the ZERO HEDGE phonies..) dont know the real world...they live in a bubble where its okay to let companies fail...get 20% plus unemployment..and when the riots hit the cities...they are probably rich enuff and spoilt enuff to take the next plane out to france or canada.........
well lucky for the rest of us...we have leaders that look at the big picture...for whateva u may disagree with current policy....we have staved off a depression...basically retraced to DOW 10,000+...avg 401k is higher than it was at 2007....(i know mine is)....
sometimes it pays to know when to give it up..and move on...alas..it seems like MARIA and the rest of u PHONIES on ZERO HEDGE...dont know...like they say a bad clock is right twice a day...so maybe u guys will still be around when the next crisis hits in 15yrs...sigh.
How does one moan in one breadth? And who the fuck is Maria? Am I on the right web site? Wait, is this Huffington Post? CNBC? WTF?
the depression hasn't been staved off. it's just starting. your sense of financial literacy is telling in that you have made this judgement based on dow 10 k and your 401 k balance (you must be a pretty good trader to have a 401k balance higher now with spx at 1080 than 2007 with spx at 1500+). anybody with a 10 trillion checkbook can make the equity market go up. oil too. food too. with increasing unemployment.
this ain't gonna end well pal with wall st moving the prez around like a little puppet.
OK, Your 401k is stuffed with fiatocos,,, you are still way behinde from 2007. The DXY is currently at 75.06, lower than whale shit. Good luck with your government intervention...
Wow. Some really great points. I'm glad to see I struck a nerve. Goldman Sachs compensation model for all. Yeeeeehaaaaawww.
"we have leaders that look at the big picture"
Thank God! For a while there, my cynicism had me thinking they were only in it for themselves. So much better knowing that they're looking out for us plebes. Guess I'll go back to watching TV Guide channel and put my pitchfork down.
Everyone feel better now... more endless rants...what a waste of time
Well, that cleared it all up.. Thanks
I meant Marla..(pardon me i dont read the nonsense daily...)..and as for u being on huff..post or not,well i didnt know zero hedge was the flip side of the huffington post...but there sure seem to be a lot of partisan hacks on here now that u mention it...
"It was all good just a week ago"
"Punishing firms that accepted government funds, effectively under duress, and who have managed to actually pay those funds back (at a gain to the taxpayer, you might also notice) is a dangerous act."
You'd rather reward them for taking our money? Show me the way to the ticker tape parade.
Smoke and mirrors anyhow...
Bird and Fortune said it well, " I have a very simple solution: abolish all bankers bonuses straight away, now...with one proviso...that all bankers receive full compensation for their loss of earnings, that's fair don't you think?"
I have to agree with the Marla, but I was still spitting nails reading Godsachs was not to be touched, so I relented on just taking their computers away. (a girl needs her dreams)
Godman Sachs does NOT play well with others!
A-fucking-men.
Right or wrong, regulating executive compensation is a final attempt to revive an effectively dead financial sector. The fatcats are just taking too much of the profits, there is no benefit to anyone but them. No way will anyone voluntarily give that sector a dime, unless at least a token attempt is made to reduce their slice of the pie.
tough cases make for bad law
Because of my immense edumacation, skills, and experience, I tried to get a Czar job. I thought it would be right up my alley. Ever since I was a kid, I've wanted to be a Czar. But I guess it wasn't meant to be...
"Dear Czar applicant,
Thank you for your interest in government service.
Unfortunately, there are no openings for “The Beer Czar“, “The Boob Czar“, or “The Czar Over All Creation”.
Sincerely,
The Hiring Czar"
I’ll try again soon, when there are sure to be lots more Czar jobs opening up.
I like the Bo^o^b czar myself.....
They say it takes about 10k of salary per month to land a job in a normal economy, maybe by the time your kids are out of highschool you might have landed one....
Good luck Mr. Future Czar....
P.S. Your post is funny..
BTY...
Stay thirsty my friend..
I can't understand how any institution which is the recipient of taxpayer support (be it TARP, selling shitty paper to the FED at a ridiculous mark, getting overpaid by a bankrupt insurance company, FDIC issuance, whatever) can be allowed to pay one cent in bonus. Period.
This is the greatest financial rape in history, and YOU are the one being ass fucked six ways from Sunday. There should be nothing less than rioting in the streets over this.
Money is a derivate of of some form of energy.
Our monetary sytems are based on more energy.
When there is not enough energy, only fraud and creative bookkeaping can make it appear to be functioning.
It isn't about banker's pay. The issue is the reach of government. It is about contact law (in the case of some). It is about the freedomm and liberty that Americans have enjoyed for centuries and leveraged to build the most prosperous, vibrant economy and the highest living standard in the world. Very, very dangerous precedents are being set. The citizens of this country will regret actions undertaken by policy makers from Czars, to uncontolled spending, to unmanageable national debt to run-away taxation. These are all detrimental to what is needed most right now....job creation. Mistakes were made and they need to be corrected but not by expanding government involvement in the economy.
BRAVO,,,,,BRAVO
10:30 am In Florida and that was refreshing...
Thanx
MS, thanks for getting down on this issue. It is so deep and wide that this hardly does it justice.
The question of wealth and poverty and our responsibility is a key discussion. Again, is all gain ill?? AT whose cost is it a gain?? There are more questions than this. I think these are the basic ones. Also, exactly what/who is responsible for the crushing disturbance we are sorting out?
Many are long blame and short personal responsibility.
The appelation "Czar" is actually quite fitting. These czars apparently have the ability to create law by diktat. No legislation required. No recourse for the subjects.
The republic is dead. Long live the plutocracy.
Marla relax. The czar issue is as old as Methuselah. Just needed a little anarcho rant, eh? Fine.
Still, the payback of some TARP recipients coming in with "a gain to the taxpayer"...Now now Marla - you eroding your well deserved respect - it's a trifle and laughable. So take a chill, recognize that we're sitting under a load of shit worth trillions/nothing, depending on who is cooking the books today, and don't sweat the small stuff. It'll do your impending coronary wonders.