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speechlesstx · Mar 23, 2009, 06:52 AM

Not content to punish AIG executives who received congressional-approved contractual bonuses with a punitive tax bill, Obama is ready to oversee executive pay on just about everyone. I posted earlier that his spending bill, A New Era of Responsibility, calls for just such "social justice."

"There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few.. . It's a legacy of irresponsibility, and it is our duty to change it."

Change is coming...

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said...

The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving U.S. government bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission. Last month, as part of the stimulus package, Congress barred top executives at large banks getting rescue money from receiving bonuses exceeding one-third of their annual pay.

Beyond the pay rules, officials said the regulatory plan is expected to call for a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.

Forget the talk about socialism, what we have in Obama is liberal fascism. No?

tomder55 · Mar 23, 2009, 07:45 AM

Wage and price controls worked so well in the 1970s .

Let's say that there is a well run bank that has not received bailout money and is in no danger of collapse. (there are many ) . Why should the people who are running sound operations be subject to wage restrictions ? Why would they even stay employed there when their talent could be used in an industry with unregulated wages ? The bank will lose a talented manager and will probably replace with a less competent one.

But since the gvt. Wants to control wages ,let's start with the Hollywierdos that support him.

hoightoider · Mar 23, 2009, 07:47 AM

"liberal fascism"? I think fascism is a political philosophy that exalts nation and/or race. I am not certain what fascism has to do with our country's financial reform.

However, if you are concerned about more government control over large companies like GM, big hedge funds and other large businesses, then I think you need to understand that the "too big to fail" businesses have necessarily become our government's responsibility whenever they are mismanaged. Therefore, it is only reasonable the government, or we the people, have regulatory authority of these businesses to protect the taxpayer's interest.

tomder55 · Mar 23, 2009, 07:49 AM

Why are they too big to fail ? Let them fail .

NeedKarma · Mar 23, 2009, 07:49 AM

Originally Posted by tomder55

why are they too big to fail ? let them fail .

I think many of us agree on this.

tomder55 · Mar 23, 2009, 08:20 AM

"liberal fascism"?

Probably 'statist ' is the better term.

Modern Liberalism promotes what French Historian Alexis de Tocqueville called soft tyranny, which becomes increasingly more oppressive, partially leading to hard tyranny... As the word "liberal" is, in its classical meaning, the opposite of authoritarian, it is more accurate, therefore, to characterize the Modern Liberal as a Statist.

Mark Levin :Liberty and Tyranny: A Conservative Manifesto

hoightoider · Mar 23, 2009, 08:21 AM

Originally Posted by tomder55

why are they too big to fail ? let them fail .

Why are they too big to fail? Good question. Certainly our government needs to begin preventing businesses from getting so large that they have a gun to our head when they are mismanaged.

A business gets too big to fail when it is less costly for the American people to bail them out then to let them fail. For example, if AIG should fail, it would take down the country's insurance industry with it and therefore compound our already difficult situation.

Beware of one who offers a simple answer to a complex problem.

speechlesstx · Mar 23, 2009, 08:26 AM

Originally Posted by tomder55

probably 'statist ' is the better term.

I'll buy that.

tomder55 · Mar 23, 2009, 08:33 AM

Why are they too big to fail? Good question. Certainly our government needs to begin preventing businesses from getting so large that they have a gun to our head when they are mismanaged.

A business gets too big to fail when it is less costly for the American people to bail them out then to let them fail. For example, if AIG should fail, it would take down the country's insurance industry with it and therefore compound our already difficult situation.

I certainly agree that no company should be in a position to be too big to fail .That is why anti-trust laws were created.

But if AIG were to fail why wouldn't other insurance companies like Mass Mutual or any of the other major insurance companies pick up the slack ? What was so special about AIG except that so many gvt. Officials have a personal interest in the performance of Goldman Sachs which was heavily insured by AIG ?

speechlesstx · Mar 23, 2009, 08:35 AM

Originally Posted by hoightoider

Beware of one who offers a simple answer to a complex problem.

Beware of an administration that promised unprecedented transparency but in two short months has been anything but.

Geithner Aides Worked With AIG for Months on Bonuses

Econ board has yet to meet publicly

speechlesstx · Mar 23, 2009, 08:40 AM

Originally Posted by tomder55

But since the gvt. wants to control wages ,let's start with the Hollywierdos that support him.

I say again, let's start with Soros and all his "philanthropic" efforts.

excon · Mar 23, 2009, 08:45 AM

There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few.. . It's a legacy of irresponsibility, and it is our duty to change it.

Hello Steve:

I couldn't agree with him more. Furthermore, the American electorate agrees with him. I, for one, am thrilled he's going to change it BACK TO WHERE IT WAS when the middle class was growing.

Excon

speechlesstx · Mar 23, 2009, 08:59 AM

Ex, you've become a real paradox. You want the government to make illegal commerce legal, yet you think it’s a good thing to punish people for making as much money as they can legally. So instead of pot smokers in prison we’ll have your neighbor there for making a fortune selling widgets on the Home Shopping Network.

NeedKarma · Mar 23, 2009, 09:03 AM

How did you make the link to people making money ending up in jail??

hoightoider · Mar 23, 2009, 09:08 AM

"I certainly agree that no company should be in a position to be too big to fail .That is why anti-trust laws were created."

Sir, your lack of understanding is embarrassing me.

Other insurance companies cannot pick up the slack because AGI's losses are simply too great. All of the insurance companies combined cannot fund the life insurance and other policies written by AGI. Also, to ask a 55 year old man to replace his life insurance policy he bought when he was 25 years old would now be a lot more expensive for him and therefore he might not be able to replace it.

In 2000, congress passed a law that allowed companies like AGI to get into the securities business with no capital requirement rules. Thus, AGI promptly sold more Credit Default Swaps then they had funds to cover - like 30X as much. Anti trust laws were not applicable. This recklessness brought down the entire corporation to include the insurance side of it.

I think if there was an obvious, simple answer to our problems, someone would have thought of it and the rest of us would have readily agreed.

excon · Mar 23, 2009, 09:16 AM

There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few.. . It's a legacy of irresponsibility, and it is our duty to change it.

Originally Posted by speechlesstx

ex, you've become a real paradox. You want the government to make illegal commerce legal yet you think it’s a good thing to punish people for making as much money as they can legally.

Hello again, Steve:

Nobody is more consistent than I am when I am.

In the quote above, Obama didn't say that the money wasn't made illegally. He just said the playing field was tilted to favor a few. Now, he's going to tilt it back.

It WAS tilted.

Excon

speechlesstx · Mar 23, 2009, 09:24 AM

Originally Posted by NeedKarma

How did you make the link to people making money ending up in jail????

Theoretically, NK. The illegality of marijuana doesn't stop people from partaking. A cap on compensation isn't going to stop people from making more money than they're supposed to. Do you suppose there may be consequences for making too much money under Obama's grand social justice plan? People go to prison for things like tax evasion, money laundering, etc. Don't they?

speechlesstx · Mar 23, 2009, 09:45 AM

Originally Posted by excon

In the quote above, Obama didn't say that the money wasn't made illegally. He just said the playing field was tilted to favor a few. Now, he's going to tilt it back.

It WAS tilted.

And if he's going to limit executive pay, what will be the consequences for going over? What, you don't think there will be consequences?

galveston · Mar 23, 2009, 09:51 AM

Will he limit the obscene salaries that some sports figures get?

Will he cap senators pay, his own? If he is consistent, he will have to.

Don't hold your breath waiting though.

tomder55 · Mar 23, 2009, 09:54 AM

hoightoider ,

Well thank you for the education . But the fact is that the rescue of AIG is unnecessary ;it is distorting the credit crisis and extending it.

Let me ask you ; if the business AIG was taking on was risky then why weren't they charging sufficient premiums to cover the risk ? Loyd's of London wouldn't make that mistake.

If the problem is the swaps or as the gvt calls it "toxic assets " ,then why not instead go chapt 11 ;put the swaps up for renegotiation or write off ;and preserve the solid part of the AIG business either through AIG itself ,or it's many competitors who could absorb the solid assets of AIG ?

WE do not need every bank ;broker house or insurance company to survive . There are winners and losers in our system .

The big problem the way I see it is that the gvt. Is holding onto AIG to launder TARP money to the other finanacial institutions that they have an interest in . It has nothing to do with the old man's life insurance. I say it's better for AIG to go bankrupt than the country .

Embarrassing isn't it ?