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If FedGovt can regulate bank exec pay, what in banking can't they regulate?

Discussion in 'U.S. Politics' started by Little-Acorn, Feb 4, 2009.

  1. Little-Acorn

    Little-Acorn Well-Known Member

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    A long, long time ago in a galaxy far, far away, we had an idea that the Federal government's authority was limited to the powers given to it by the Constitution; and that all other powers were forbidden to the Fed.

    That's long gone, of course, but this latest incursion makes me wonder.

    President Obama has announced that senior execs in banks (those getting Federal bailout funds) will be forbidden by the Fed govt to make more than $500K/year. Has the US Govt ever imposed such wage caps on one single industry like this?

    And, if they have the authority to do this under the Constitution, what's left that they don't have authority to regulate?

    Is "limited government" dead?

    ----------------------------------------

    http://www.foxnews.com/politics/fir...y-government-assisted-financial-institutions/

    Obama Caps Executive Salaries for Bailed-Out Firms at $500G

    Administration limits pay to $500,000 a year for executives of bailed-out companies in a new get-tough approach to bankers and Wall Street.

    FOXNews.com
    Wednesday, February 04, 2009

    President Obama announced strict limits on pay to executives of bailed-out financial firms Wednesday, slamming Wall Street top dogs as "shameful" for accepting billions in bonuses last year.

    The new restrictions will cap pay for government-aided Wall Street executives at $500,000.

    Obama said he's instituting the new rules to put a stop to what he called a "culture of narrow self-interest and short-term gain" at the expense of taxpayers, and to take the "air out of golden parachutes."

    "This is America. We don't disparage wealth," Obama said. "But what gets people upset, and rightfully so, is executives being rewarded for failure, especially when those rewards are being subsidized by U.S. taxpayers.

    "For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't just bad taste. It's bad strategy. And I will not tolerate it as president," he said.

    Treasury Secretary Timothy Geithner said the limits are designed to "strengthen the public trust" in the government's goal of creating jobs and freeing up credit. He said taxpayers currently share a sense that those not responsible for the financial crisis are bearing a greater burden than those who were responsible.

    Last week, Obama called it "the height of irresponsibility" for financial employees to reap the billions in bonuses they got last year. A report from the New York state comptroller found employees of the New York financial world earned about $18.4 billion in bonuses last year.

    The administration's most restrictive limits would apply only to struggling large firms that receive "exceptional" assistance in the future. Healthy banks that receive government infusions of capital would have more leeway.

    Under the plan, firms that want to pay executives above the $500,000 threshold would have to compensate them with stock that could not be sold or liquidated until they pay back the government funds.

    In addition, under the plan banks would face tougher restrictions on so-called golden parachutes and tougher transparency rules on expenses such as office renovations, entertainment and conferences.
     
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  2. HankHill

    HankHill New Member

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    Although I like the sound of it, it's just not right...

    What article of the Constitution gives the government the right to do this?

    BUTTTTTTTTTTTTTTT........ We did bail those corporate pigs out, so now we own them...
     
  3. Pandora

    Pandora Well-Known Member

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    I like those new rules, I wish there were tons more rules for anyone taking a bail out.

    Any private company or group STUIPID enough to take the bail out welfair deserves to be under the thumb of Pelosi and co.

    The more rules there are out there the more companies wont be sucked into obama socialist heaven.

    So we should wish for tons more rules, as long as they only apply to those stupid enough to think this bail out is a good idea.

    and what it will do is shine a big flood light on the fact that if we let them buy us with these bail outs, they will own us.

    Those dumb morons in congress and in the obama white house might actually help the conservative movement without even trying :)
     
  4. poptart

    poptart New Member

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    -What part of the constitution did they get the idea of giving them the money in the first place. Also, with the salary limit, there is more incentive for them to pay it back quicker.
    Goldman Sacks has already said they are ready to pay back the funds that the government has given them.
     
  5. Pandora

    Pandora Well-Known Member

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    OH its a total abuse of power, I understand that but its kind of like an abusive boyfriend.

    he slaps you and you stay with him, he kicks you and you go back to him, at what point do you say its enough? and how do you justify today was enough when you put up with so much in the past.

    we never stood up to the government when they abused power before, for the most part we voted the same jerks back in. they wont take us seriously now, if we were going to stand up to them...... we should have done it ages ago. It seems like a lost cause at this point.
     
  6. Pandora

    Pandora Well-Known Member

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    as for the salary limits, I wish we would demand that about congress. their stupid cafe we pay for, all their retreats we pay for, they give themselves pay raises then we pay for it. there should be a cap on how much of our money they can spend on their selves, if we cant do that, we cant make them do anything
     
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  7. samsara15

    samsara15 Member

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    I thought limited goverment died 9/11. Yes, it is an abuse of goverment power. Let's see these corporations buy back their right to govern themselves. Meanwhile, yes, corporate executive salaries are not in the best interests of stockholders. Who owns the company, management or the stockholders? Executives have abused their power, and the bill has come due.
     
  8. Bunz

    Bunz New Member

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    Article one section 8 pretty well sums this up for you.
    To regulate commerce with foreign nations, and among the several states, and with the Indian tribes"
     
  9. Bunz

    Bunz New Member

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    I dont disagree with this, but it started much earlier.
    Not really, Congress is allowed this in the Constitution as I pointed out earlier. Also, the federal government puts all kinds of stipulations on the far majority of the money it hands out. You ever try to manage a federal grant?
    I am not sure I agree with this entirely. Corporations who have the most return for thier stockholders generally require talented management on the upper levels. The way they are able get the best management is through salary and other perks. You want a well run company? Its gonna cost $$
    In many cases management makes up a considerable portion of the stockholders so often times they are one in the same. I wont disagree that in some cases the upper management have abused thier power and probably been greedy, but they are accountable to thier shareholders, and ultimately thier customers. When all of a sudden, the US government is a major shareholder, they should be able to make thier voice heard in the same way a block of normal shareholders would.
     
  10. Little-Acorn

    Little-Acorn Well-Known Member

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    Bailing out banks etc. has nothing to do with the authority granted in that part of the Constitution.

    Can anyone here point out what part of the Constitution does give the Feds the authority to bail out banks and set the pay of senior executives?
     
  11. BigRob

    BigRob Well-Known Member

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    I think it is a tough sell to make the case that limiting private corporation pay falls into "regulating commerce between states."
     
  12. Little-Acorn

    Little-Acorn Well-Known Member

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    It's an argument that's been literally laughed out of the Supreme Court.

    But if you've done no homework, and know nothing about the long history of such big-government attempts, I guess you can make such arguments with a straight face, and with some hope that you can get someone to believe you.
     
  13. pocketfullofshells

    pocketfullofshells Well-Known Member

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    the article of, Capitalism...if they want money for a bail out, they get strings...Just like when you give a loan, you give rules for the loan...if you give someone money on the condition they do x y and z.....They can always say no and go under...fine by me...enjoy the ride.
     
  14. pocketfullofshells

    pocketfullofshells Well-Known Member

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    Funny you attack pelosi and Obama. but not the president who actuly pushed and got the bill passed...you may recall his name..BUSh
     
  15. pocketfullofshells

    pocketfullofshells Well-Known Member

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    Silly reader :)
     
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