They can't do ANYTHING right... can they
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No problem. I'll just post the article. Emphasis mine (I'm attempting to leave bias out of it, really)QUOTECongress wanted to guarantee that the $700 billion financial bailout would limit the eye-popping pay of Wall Street executives, so lawmakers included a mechanism for reviewing executive compensation and penalizing firms that break the rules.
But at the last minute, the Bush administration insisted on a one-sentence change to the provision, congressional aides said. The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction, which was the way the Treasury Department had said it planned to use the money.
Now, however, the small change looks more like a giant loophole, according to lawmakers and legal experts. In a reversal, the Bush administration has not used auctions for any of the $335 billion committed so far from the rescue package, nor does it plan to use them in the future.
Lawmakers and legal experts say the change has effectively repealed the only enforcement mechanism in the law dealing with lavish pay for top executives.
"The flimsy executive-compensation restrictions in the original bill are now all but gone," said Sen. Charles Grassley, R-Iowa, ranking member of the Senate Finance Committee.
The modification reflects how the rapidly shifting nature of the crisis and the government's response to it have led to unexpected results that are just now beginning to be understood.
The Government Accountability Office, the investigative arm of Congress, issued a critical report last week about the financial industry rescue package that said it was unclear how the Treasury would determine whether banks were following the executive-compensation rules.
Michele Davis, spokeswoman for the Treasury, said the agency is working to develop a policy for how it will enforce the executive-compensation rules. She would not say when the guidance would be issued or what penalties it might impose. But she said the companies promised to follow the rules in contracts with the department.
If I'm reading it right, which is questionable in and of itself, Exec's are only required to not hand out this rescue money to each other if they sell their assets in an auction. So by directly buying these assets, the fed has given them the right to use ALL of this money on golden parachutes if they so choose.
I'm not going to put any blame on Bush like this article does. I'm more upset at the dog and pony show that was this bill making its way through congress. The part about it that annoys me most is this. While our congresscritters seem unable to wrap their heads around the situation, there are clearly individuals who are out there gaming it. This indicates that the situation isn't that hard to understand, and that our congresscritters are just functionally retarded. -
QUOTE (ANunes @ Dec 15 2008, 11:33 AM) <{POST_SNAPBACK}>While our congresscritters seem unable to wrap their heads around the situation, there are clearly individuals who are out there gaming it. This indicates that the situation isn't that hard to understand, and that our congresscritters are just functionally retarded.
If this assessment is true, I... I don't know what I'm going to do, but it won't be pleasant. -
QUOTE (Jedd @ Dec 15 2008, 01:09 PM) <{POST_SNAPBACK}>If this assessment is true, I... I don't know what I'm going to do, but it won't be pleasant.
You're going to run for office?
*zing!* -
Sorry about the long delay in posting, but the market just closed and I had no time to do so before.
You're reading this entirely different than me, and for that reason I wish someone else from the Palm Beach Post wrote it.
You're saying thatQUOTEExec's are only required to not hand out this rescue money to each other if they sell their assets in an auction.while I believe that the article intended to get across something of this nature: restrictions on wall street executives will only be in place for those companies who seek bailout money (TARP) from the government. If this were the case, I see no problem with it. The goverment has no right to tell people how much money they should earn, just as they can't tell a baseball player he can't earn 161 million over seven years.
For instance, Barclays Capital, didn't require any government fundings from the UK or the USA -- so there are no restrictions except for board approval. But remember, if they post something outrageous, they'll be a share holder upheavel and they'll face extreme scrutiny from all sorts of media outlets.
With that being said, if I'm reading this wrong, then I have no idea. Andrew, how you're interpreting it doesn't really make that much sense to me, so maybe we're both wrong? Let's try and find alternate sources corraborating this article. -
This article seems to be the complete article, which goes in to discuss the different ways executive compensation could be somewhat controlled. It also explains why the government is thinking 'we can only penalize those who need our help.' Which once again, I have no problem with.
http://www.washingtonpost.com/wp-dyn/conte...ml?hpid=topnews -
The original intention of the bailout plan was to allow the government to purchase the troubled assets from the companies thus giving the companies a much needed influx of capital while simultaneously taking the risk posed by those assets off the companies' hands so they would feel more comfortable about lending money again.
The problem is, the treasury isn't doing that. Instead, they're just giving (either as handouts or loans) money to the companies and hoping that the companies themselves will sort the situation out.
But, since the Bush administration added the "only companies that sell their troubled assets" line, all of the companies that are receiving these funds from the bailout but are not selling troubled assets to the government are exempt from the restrictions. That's what the whole fuss is about.
I agree with your statement that people should be allowed to earn whatever they earn and the government should not get involved, but in this case I don't think it's really an issue about the government intervening where it has no right to do so. The government is giving them money, so they should get a say in how that money is spent and what needs to happen for them to receive more funds in the future.
Of course, I think the whole last paragraph is bullshit, since I don't think the government had the right to give them money in the first place, but whatever. -
I think the original intent is what you seem to be reading into. They wanted to have a provision in the bill to prevent companies who have in theory failed (otherwise they wouldn't need the money) from continuing to give huge payouts to the people who led the company to failure. However, this article seems to be saying that there was a bit added after the fact to say that only if your assets were acquired through auction would these penalties be enforceable. This is all well and good if our government restricts its application of funds to these auctions, but that has not in fact been the primary method of purchase. (I don't know if that part is true, that's just what the article says).
I'm having trouble finding any additional info about it, really.QUOTE (Governor @ Dec 15 2008, 04:24 PM) <{POST_SNAPBACK}>The government is we are giving them money, so they we should get a say in how that money is spent and what needs to happen for them to receive more funds in the future.
if only...
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