Wednesday, February 4, 2009

Buddy, Can You Spare a Mil?

Obama and his economic team at the White House have finally done something a progressive can wet his/her pants about: they want to put a compensation cap of $500,000 on anyone working for any firm that receives any more TARP funds, including CEOs. To which I say, about effing time. In years past, there used to be a limit on how much a corporation could write off on salaries, but I believe that must have gone away, because what would be the point of paying people huge salaries if you couldn't write it off your corporate income tax?

And the response by the various Repugnican talking heads and of course, business-folks who think about these things all the time, has been pretty predictable: "How do we retain top talent if we can't pay them s&%tloads of money?"

Seriously. They keep calling these loan-sharking imbeciles "top talent."

WAKE UP!!! Haven't you people been watching what's been happening? These fine examples of top talent have been working specifically to make themselves a great deal of money by exchanging feathers & sand, and calling it gold. All the while, regulators have been watching this and seeing the money going to the major shareholders and repeating to themselves endlessly that it's "gold not feathers, gold not feathers, gold not feathers."

Somehow, by exchanging debt instruments, these geniuses have created a lot of real money for themselves while their investors (people like you and I) not only didn't get anything in return, it's like we just put all of our money on black and lost.

What I don't understand is why the Mafia didn't come up with this scheme a whole lot earlier.  In the book Wiseguy, Henry Hill describes stealing bonds and selling them for ten cents on the dollar to Wall Street bankers who would then use them to collateralize loans from foreign banks (and you only needed about ten percent of the value of the loan in collateral). Sounds so familiar...

What's missing in all of this is that it's the US economy. The whole damn economy. If these "wise stewards" are all we can hope for, I tend to agree with Chris Hedges latest article: It's Not Going to be OK.

If we don't put some kind of restrictions on these people, they will continue to do the wrong thing. Personally, I only expect to pay people for doing the wrong thing when I sign my check over to the IRS every year.

Oh... right...

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