Meh Culpa

Be Still My Beating Heart: Another Quickie

No, this post is not about sex.

Ha.

Gotcha.

Actually, I’ve been off writing a  paper and taking an Anatomy & Physiology  final.  I’m between classes right now, so I thought I’d pop in for a short chat.  (I’m not like some of my friends who can multitask.  I can walk or chew gum, but not do both at the same time.)

I’ve got to say I am not surprised by Jake DeSantis’ resignation from AIG’s Financial Products division.  I rather liked his letter detailing his reasons for leaving the company, too.  When I heard that the House had agreed to impose a 90% tax on bonuses, I thought the amount was excessive.  Forty-five or fifty percent I could see, but not ninety.  That was just counterproductive, knee-jerk politics at its worst.  I also can understand why DeSantis and other members of AIG-FP view AIG CEO Ed Liddy with distrust after he trembled before Congress, and I think DeSantis is  right to say that Congress is going after the wrong people.

The Man in Orange--a prohpetic color

The Man in Orange--a prophetic color

We should be tracking down The Man in Orange, Joe Cassano.  Just haul him in!  After all, he’s the one whose [alleged] shenanigans brought down AIG, so he should give back the money he made–$280 million during the last eight years.  That’s $35 million every year! (Who really needs that kind of money?)  Cassano  also should return the $1 million consulting retainer AIG paid him for five or six months after he “left” the company.

And another thing: don’t imagine Americans are only enraged about AIG bonuses.  Such salaries and bonuses, of the sort American companies have paid for ages, are egregious, and they don’t seem to be ending anytime soon.  But they should.

No one else in the world pulls in as much compensation as high profile American executives and Wall Streeters.  I keep wondering why.  We hear the bit about the need to pay insane prices to retain the best talent–as if these guys have their bosses in a choke hold.

What are those bosses afraid of?  Aren’t those the same scare tactics the last administration used when peddling the Iraq War?  Ooooh: We’ve got to be afraid, very afraid, and do everything these overpaid execs dictate, even when what they tell us nearly bankrupts our economy.

I mean,  let’s just say it: there is speculation abroad that we’re pretty close to falling in the pit with Iceland,  so close the Chinese are watching the Fed print more money,  seriously worrying about their investment and the nosedive their own currency may take as a result of all that American paper floating around.   Hence, the suggestion of a new international currency that’s not based solely on the economy of one nation.  A pretty good idea that was, too.

I think Obama and Congress should consider limiting executive pay like the Brits are planning to do.  It’s not as if these executives know anyone else in the world willing to pay nearly as much in compensation.  They’d have to be like everyone else, and take what the market can bear.  Right now, the market can’t bear a whole lot.  But that’s capitalism for you!

Besides, think of the money we taxpayers would save.  😀

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March 25, 2009 - Posted by | AIG, bailout(s), borrowing, Congress, Economy, Executive branch, Federal Reserve, House of Representatives, National Security, Obama, Obama administration, politics, recession, Treasury | , , , , , , , , , , , ,

2 Comments »

  1. Remember it is a strategic competitive advantage to the stronger banks that the weaker ones have their exec comp limited… I don’t think Barak Obama will stand up to the execs at the stronger banks. I’ve just posted on this, in case you are interested.

    Comment by euandus | October 22, 2009 | Reply

    • Since it’s been seven months since I wrote that post, I had to skim over it again to bring myself up to speed. and actually I think I would fall over dead of shock if Obama decided to do the right thing and re-regulate the banking industry. (And then follow through. ‘Cause, you know, he has a problem with that.) At the time, I was still stewing over Joe Cassano and folks like him getting away with fiscal murder, or at least turpitude. Between then and now not a whole heckuva lot has changed. Folks like Cassano, banks like World Savings (see here and here, and organizations like Countrywide–those into fraud–are seemingly at it again.

      I tend to fall asleep when the subject of money or economics comes up but to me it’s a no brainer that the allegedly stronger banks want executive compensation limited at their competitor’s banks no matter who those competitors are. That’s just the nature of the beast. But I guess strength is all in the eye of the beholder:

      On June 10, Treasury Secretary Timothy F. Geithner appointed a well-known Washington lawyer, Kenneth R. Feinberg, to oversee the compensation of employees at seven companies receiving billions in federal assistance: the American International Group, Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers.

      I don’t know about you, but I think B of A, AIG, and Citigroup are pretty big. However, I’d like to see rules apply equally to other firms to level the so-called playing field. I don’t think it’ll happen because Goldman Sachs alum as well as its current employees stand to gain if that doesn’t occur. (N.B. I’ve become much more cynical in the last nine months or so.)

      BTW, I betcha investment banks that took money from the government are covered. GS only escaped a few clauses and then some by paying back its loan. Hence, their executive compensation could still run amok.

      Comment by mehculpa | October 22, 2009 | Reply


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