Obama to Announce New Executive-Pay Caps

“If you take the King’s coin, you do the King’s bidding.”

“First, I am against bailouts period but this is a slippery slope we do not want to go down. What we have here is the 2nd stage of the commies in charge nationalizing business. The first stage was the bailout.”

I too am against the bailouts, no doubt. But the bailouts are now a reality and both parties are equally liable for passing them.

The TARP 1 was passed with no conditions under Bush and that is insanity. That would be like if you own a small business and come tax time in April, you write a check for $50,000 of your own money and drive to New York and hand it to a Wall Street exec and say “here, do with this as you please, no questions asked”. That is esentially what happened with the first bailout.

The point of the thread now is TARP 2, which will hopefully be a bailout with conditions. This would be like taking that same $50,000 check to Wall Street, sitting down with them and saying “listen, this is a loan and here are my conditions and this is what I expect in return for the loan, sign here if you agree. If not, see you at the auction of your assets”. You would have EVERY right to assert such conditions since you are the creditor of their debt.

Saying that this is a slippery slope is complete unfounded paranoia without a reference to historical precedents. The government, with OUR MONEY, is loaning or investing in Wall Street and as such has every legal right to impose any restrictions at their (or OUR) discretion.

I say it is paranoia because if they try to impose restrictions like this to wholly private companies, you would first see the courts laugh the government out of the courthouses and second, you would see a mass uprising on against members of Congress in the next election cycle.

Just review the court dockets of the 1930s as precedent for this. Contrary to popular belief, not much of FDR’s new deal survived the 1930s after the government was sued. Only a few things survived the courts like SS, unemployment insurance, Glass-Steagall, etc. Most of it was tossed out as unconstitutional. And this would be such a case.

If you are tens or even hundreds of billions of dollars in the hole, you give up the right to attract top talent with exorbitant salaries.

There is the law of unintended consequences. 500K might seem reasonable to you and me, but it may not be acceptable to people that are having the restrictions placed on them. You might have personel in a really profitable divison of the firm bolt for the exits with the firms clients...

“There is the law of unintended consequences. 500K might seem reasonable to you and me, but it may not be acceptable to people that are having the restrictions placed on them. You might have personel in a really profitable divison of the firm bolt for the exits with the firms clients...”

Since it is our money on Wall Street we CAN and we SHOULD impose caps that seem reasonble to US! As the creditor, we are calling the shots.

Divisions inside companies don’t go public or conversely file bankruptcy, companies do. They all thrive or die together. So if it’s not enough even for profitable divisions, tough break..let them bolt and let the company try to restructure in Ch 11 or liquidate totally. That’s how capitalism is supposed to work.

So long as money is going from my paycheck and your paycheck to Wall Street accounts, I say we impose such drastic restrictions that no bank or entity would go for a bailout. Let them go the old fashioned capitalist way. Dig themselves out or die out....credit market freezes and depressoin II be damned.

Let them go the old fashioned capitalist way. Dig themselves out or die out....credit market freezes and depressoin II be damned.

Personally I think the big financials that are insolvent should be broken up. It is over. They won't ever regain people's confidence.