There seem to be several misconceptions in that post. First is that this mess was somehow a matter of the government pressing for loans to poorer people. This ignores several of the key facts in order to spin this out as somehow Clinton's fault. Subprime mortgages were an industry standard practice, not just for Freddie and Fannie, but for every bank. There was a gigantic housing bubble, affecting not just the poor, but the middle and even wealthy classes, and mortgages were given out as if prices would rise forever. Lehman Bros. didn't implode because of housing for the poor, they imploded because they were engaged, of their own volition and for their own profit, in extremely risky business. And AIG was "insuring" all the others - by assuming a large crash was statistically impossible. :wacko:
Second, as I'm pretty sure was made clear in the links, the banking guidelines are about the form of executive compensation, not a cap on its quantity. This is not about getting back at fat cat CEOs. This is about tweaking executive incentives so that they make decisions based on stable, long-term value, rather than short-term stock price. By heavily taxing salaries, but making stock options and golden parachutes relatively cheaper, the government had encouraged risk taking - now it is obviously reconsidering the sanity of that idea.
As for AIG, and their bonuses, that's an issue of the use of public funds. If they want to pay their CEO (I presume you mean CEO?) ridiculous sums of money, that's generally their business. But if they're begging the government to save them from total implosion (and the implied threat to the rest of the economy), and they get that money, it's no longer just their business whether they want to fork it over to executives. They are being helped out by the taxpayer, and that means spending money responsibly, and not pocketing it. You can't be collecting your multi-billion welfare cheque on day one, then pretending you're John Galt on day two. That's just hypocrisy.
Is there actually a guy who only got one single dollar for his work as CEO at AIG, having been stripped of his bonus? I hadn't heard that one. Got a link?
Now, executive bonuses are small potatoes, and I don't really care much about the sums being shifted over. But there is a whole culture of lavish, inappropriate rewards that strikes me as fundamentally unhealthy. I would like to see that change, and not just in the US. The financial sector is supposed to be as dry as dust, not as decadent as a Roman orgy.
-Jester
Afterthought: You really like that "czar" meme, don't you? Isn't it nice that Obama has fewer of them than Bush did? Funny that I don't seem to remember it coming up in every second post when Bush was President...
After-afterthought: One could do worse than blaming Alan Greenspan. But I think he's just the majorette in a very large marching band, all headed for the cliff...
Second, as I'm pretty sure was made clear in the links, the banking guidelines are about the form of executive compensation, not a cap on its quantity. This is not about getting back at fat cat CEOs. This is about tweaking executive incentives so that they make decisions based on stable, long-term value, rather than short-term stock price. By heavily taxing salaries, but making stock options and golden parachutes relatively cheaper, the government had encouraged risk taking - now it is obviously reconsidering the sanity of that idea.
As for AIG, and their bonuses, that's an issue of the use of public funds. If they want to pay their CEO (I presume you mean CEO?) ridiculous sums of money, that's generally their business. But if they're begging the government to save them from total implosion (and the implied threat to the rest of the economy), and they get that money, it's no longer just their business whether they want to fork it over to executives. They are being helped out by the taxpayer, and that means spending money responsibly, and not pocketing it. You can't be collecting your multi-billion welfare cheque on day one, then pretending you're John Galt on day two. That's just hypocrisy.
Is there actually a guy who only got one single dollar for his work as CEO at AIG, having been stripped of his bonus? I hadn't heard that one. Got a link?
Now, executive bonuses are small potatoes, and I don't really care much about the sums being shifted over. But there is a whole culture of lavish, inappropriate rewards that strikes me as fundamentally unhealthy. I would like to see that change, and not just in the US. The financial sector is supposed to be as dry as dust, not as decadent as a Roman orgy.
-Jester
Afterthought: You really like that "czar" meme, don't you? Isn't it nice that Obama has fewer of them than Bush did? Funny that I don't seem to remember it coming up in every second post when Bush was President...
After-afterthought: One could do worse than blaming Alan Greenspan. But I think he's just the majorette in a very large marching band, all headed for the cliff...