The Congressional Democrats are a bunch of fuckups.
How did you feel this week, America? Did you feel safe and warm about your retirement accounts, your money-market accounts, your mortgages, your investments? Did watching the market pinwheel about amidst headlines evoking 1929 while the Wall Street Journal dared to use the terminology "worst crisis since 1930's" comfort you?
The bailout plan Paulson put on the table has problems. It unfairly compensates private shareholders of financials as it mops up a huge, rotten base of failed mortgage securities from their balance sheets. It adds additional risk of taxpayer loss - though the floor it sets on these securities will likely be a profitable price if the economy recovers. It represents "moral hazard" in the sense that it lets banks off the hook for massive, historic, monumental risk management laxity.
That's great. You know what? Those are legitimate criticisms. I counter with, "Yeah, but if we don't do it there won't be any banks left to wag fingers at." We need to learn this lesson, to an extent. We also need the bailout.
But you know what we don't need? It doesn't need Nancy Pelosi to turn this historic, potentially-lifesaving arrangement into an election-year game of chicken with the whole fucking financial system in the balance.
Asking for a cap on CEO wages in the course of this bill is fucking irresponsible. I'm fine with the second stimulus plan - you know what, compromise is what we're built on - but tacking this onto the bill is essentially daring the Republicans and economically responsible Democrats, who rightfully oppose such anti-capitalist nonsense, to kill it. At the expense of ALL of us. And for what? To make the point that some of us WERE too rich before the entire American economy collapsed?
This is not the time to have a national conversation about the ethics of CEO pay. You know what? The Democrats will have Congress in 6 months. They'll probably have the executive branch. Can we please fucking deal with that then? Is it really necessary to destroy the only reason to feel confident in the marketplace at a time like this to make some insignificant - CEO pay cannot be constrained, only restructured - point about wealth distribution?
Please stop fucking around, Pelosi. This is way, way, way too important. We're all bitter about the last 8 years, but this is far greater than politics. This is more important than election-year posturing. If you kill this bill with your fucking games, we will experience systemic financial failure. If you fancy yourself a populist, protect the people before worrying about the CEO pay problem. You can have Obama bless it in a few months. Between this and the "get us out of Iraq" bullshit in 2006 I'm starting to see why Nancy's Congress has a 9% approval rating.
2 comments:
Good post. Glad you're back.
Compensation in the financial industry is typically in the form of stock. Jimmy Cayne had $1.06 B in Bear stock last year, now he has $61.2 M. Dick Fuld had $827.1 M in Lehman stock last year, now he has $2.3 M. This is what it looks like for almost everyone in the finance industry who took compensation in equity-form. That's the beauty of equity compensation: you get paid good in flush times, and end up losing it in a downturn. Ultimately, you get what you deserve.
Also, the Dems are looking to change bankruptcy laws to keep people in their houses, along with "relief" to homeowners (I think the relief will end up going to interest groups like A.C.O.R.N).
Only found your website the day you stopped blogging. Glad you are back, too.
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