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View Poll Results: I feel about the government's requirement to cut salaries...
The government should butt out 8 11.76%
I disagree with government intervention but it feels good 7 10.29%
I agree wholeheartedly 49 72.06%
Other/no opinion 4 5.88%
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Old 10-23-2009, 11:01 AM   #21
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I read an article a while back about fears of wall street losing the best and the brightest. The author said the best and the brightest weren't in these job--they went to academia. The greediest and aggressive were in the big shot Wall Street jobs.
Love it! That certainly jibes with the people I've known over the years.
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Old 10-23-2009, 11:04 AM   #22
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I see this like going into bankruptcy court. The government cuts your some slack but you aren't allowed to keep your fourth vacation home. Almost all contracts can be renegotiated or negated by the court.
One of the proposals to modify pay included Chrysler and GM. For these two, I'd certainly be in favor of taking the bankruptcy approach. Renegotiate the labor union contracts and salaries of ALL workers to come up with a market rate. Slash the lingering retiree pension and medical payments (or let PBGC take over - since these are government owned car companies anyway, the $$ is all coming from the same pot).

Since we are arguing that execs can take a pay cut and won't leave, the same rationale applies to slashing the pay of the rank and file. We are in the middle of double digit unemployment here, after all, with rates in the teens in some of these heavy car producing areas. Let those that are currently starving and that have used up their unemployment benefits apply for the manufacturing jobs. You think these starving people would hold out for $80,000 or $100,000 a year? Of course this would never happen. Trying to actually cut costs where it matters? Not necessary when it is a government owned enterprise. What is the ratio of these top execs compensation to the total company payrolls? 1% 5%? How about revisiting the other 95-99% of compensation costs? We are in these difficult economic times, after all.
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Old 10-23-2009, 12:01 PM   #23
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Actually, there have been several cases where the businesses wanted to pay the bailout money back but the government refused to allow it -- presumably because they still wanted to tell these businesses how to run themselves, leverage they'd lose if the businesses paid it off.
Or the patient is still 'sick' but wants out of the hospital since the doctor is telling them they can not do what they want...

There were some requirements for the banks to do so they could pay back the funds... and IIRC, one was to get new capital on the open market... I have not looked, but has anybody done all the things on the list to pay back money and still not been allowed? Also, IIRC, there was a timeframe for them paying it back... the ones who paid back so far were 'early'...
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Old 10-23-2009, 12:05 PM   #24
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Actually, there have been several cases where the businesses wanted to pay the bailout money back but the government refused to allow it -- presumably because they still wanted to tell these businesses how to run themselves, leverage they'd lose if the businesses paid it off.
I believe the rationale was for everyone to take it in the shorts bailout money, so that no one could be singled out as being more risky, possibly producing runs on those institutions. Not to say there were no hidden agendas...
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Old 10-23-2009, 12:09 PM   #25
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And people are more replaceable than some think.

Absolutely! The concept that it takes decades of being on the job to become good at it is highly overrated. Whether it's corner office types in the private sector as we're talking about today or public employees putting in lifetime careers as a bureaucrat, generally some employee turnover is a good thing.
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Old 10-23-2009, 01:00 PM   #26
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One of the proposals to modify pay included Chrysler and GM. For these two, I'd certainly be in favor of taking the bankruptcy approach. Renegotiate the labor union contracts and salaries of ALL workers to come up with a market rate. Slash the lingering retiree pension and medical payments (or let PBGC take over - since these are government owned car companies anyway, the $$ is all coming from the same pot).
Already done in bankrutpcy.

GM union swallows cost-cutting concessions - May. 29, 2009

"Seventy-four percent of UAW members voted for the contract, which will allow the company to cut costs and "eliminate the wage and benefit gap" with competitors, according to the UAW president and a statement from GM."
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Old 10-23-2009, 01:19 PM   #27
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Already done in bankrutpcy.

GM union swallows cost-cutting concessions - May. 29, 2009

"Seventy-four percent of UAW members voted for the contract, which will allow the company to cut costs and "eliminate the wage and benefit gap" with competitors, according to the UAW president and a statement from GM."
I hadn't followed the news re: GM very closely. Good to see this happened. Good for the future of GM, that is.

From the article: "But the union did not agree to any wage or benefit cuts for the 61,000 UAW members working at GM."

So they clearly have a ways to go to get down to one of the basic problems. Overpaying people. Start at the top with the crooked incompetent execs and work your way down to the guy sweeping the factory floor. I have working friends and neighbors that don't make ridiculous salaries at a cush union protected job at a government owned and run company. Yet these friends and neighbors of mine are paying the salaries of these highly paid wrench turners (and I don't intend to demean lowly paid wrench turners elsewhere by the way).
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Old 10-24-2009, 06:04 AM   #28
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5 myths about Wall Street pay days

Washington's Plans May Result in Even Higher Executive Pay

Fed plan to police bank pay unlikely to curb risk

etc., etc., etc.
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Old 10-24-2009, 09:24 AM   #29
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Once again I am amazed and annoyed with CNBC "analysis" of the situation. Maria Bartiromo - with a straight face! - tries to claim that the govt seeking to control the compensation for bailed out Wall Street firms to avert future risky behavior is analogous to the government stepping in to control compensation of professional athletes.

Ummm - Maria! - highly paid athletes did not almost bring down the entire global financial system nor require massive coordinated government bailouts to avert the disaster!

Hello! Is there a brain in there at all?!?!

Doesn't matter, CNBC thinks that Wall Street should get all of the money, all of the time, no strings attached, and screw the rest of the world........

Audrey
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Old 10-24-2009, 09:40 AM   #30
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How is a company going to pay back loans when they can't get the best people? Any company run like the Government would soon go bankrupt. If Congress were to institute "pay for performance" Congress would be paid -0-.
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Old 10-24-2009, 09:46 AM   #31
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While I have heard some specific cases of seemingly outrageous compensation over the past year, all this discussion seems to take place without any facts. It's political pandering/hyperbole without knowing compensation specifics, are these execs going from $100K/yr to $50K/yr OR $100M/yr to $50M/yr (exaggerating to make a point). How can any of us have anything other than a 'feel good' opinion without knowing the actual compensation and fair market compensation? We've gone mad...
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Old 10-24-2009, 09:59 AM   #32
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I hadn't followed the news re: GM very closely. Good to see this happened. Good for the future of GM, that is.

From the article: "But the union did not agree to any wage or benefit cuts for the 61,000 UAW members working at GM."
How does this jibe with the other line in that article?

Quote:
"Seventy-four percent of UAW members voted for the contract, which will allow the company to cut costs and "eliminate the wage and benefit gap" with competitors, according to the UAW president and a statement from GM."
How do they "eliminate the wage and benefit gap" , without "any wage or benefit cuts for the 61,000 UAW members working at GM."?

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Old 10-24-2009, 10:07 AM   #33
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This is what happens when banking and investment businesses mix.

Risk taking businesses that invest for themselves and others should be allowed to keep the results as long as only their money is at risk and they can lose as well.

Banking businesses that intermediate should not be taking risks with other people’s money. If the bankers want the money they should find jobs in investment businesses and hedge funds.

The best and brightest never have and probably never will be bankers. They always have and probably always will be doctors, lawyers and scientists.

“The banks will lose their best people” is BS, pure and simple. If there is a market that screams for greater openness and more competition, it is the job market for highly compensated individuals in finance in the US. Not just banking folks either – start with CEOs that have created this mess.
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Old 10-24-2009, 11:14 AM   #34
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How is a company going to pay back loans when they can't get the best people?
I'm not real big on meddling by the govt, but I find myself crying crocodile tears on this one. Methinks there's a lot of self-righteous indignation involved...

In an ideal world, the "best and brightest" should be designing the next electric car, or curing cancer, or converting bullshit biomass to methane...


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Any company run like the Government would soon go bankrupt. If Congress were to institute "pay for performance" Congress would be paid -0-.
An excellent idea! In fact, the Congress critters should be repaying us...
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Old 10-24-2009, 11:31 AM   #35
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The pay regulation is weak-kneed, populist pandering that doesn't actually solve any problems but gives cover to gutless politicians so they can avoid making tough decisions.

Last I saw all of these financial institutions were still "too big to fail" but only now they operate with implicit government guarantees. Messing with pay formulas doesn't change this fact and it will end up being very bad policy if it serves as an excuse for not dealing with the real problem. I was in favor of saving these firms because their failure would have brought down the entire system. But now that they've been saved, they need to be downsized in an orderly fashion.
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Old 10-24-2009, 11:42 AM   #36
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How is a company going to pay back loans when they can't get the best people? Any company run like the Government would soon go bankrupt. If Congress were to institute "pay for performance" Congress would be paid -0-.
Maybe, but my air and water are clean. My house has never been robbed and I've never been mugged. Our borders have never been invaded. My mail always arrives at its destination. My food is safe to eat and my products are safe to use. Business runs smoothly due to contracts rendered enforceable by the courts. My retirement portfolio has generally been safe from fraud. I've never lost a dollar on my bank deposits. My car drives nicely over public roads and my public education has served me well . . .

I don't know what I'd pay to achieve all of that, but I think it is something north of $0.
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Old 10-24-2009, 11:59 AM   #37
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Maybe, but my air and water are clean. My house has never been robbed and I've never been mugged. Our borders have never been invaded. My mail always arrives at its destination. My food is safe to eat and my products are safe to use. Business runs smoothly due to contracts rendered enforceable by the courts. My retirement portfolio has generally been safe from fraud. I've never lost a dollar on my bank deposits. My car drives nicely over public roads and my public education has served me well . . .
Wow! Where is this wondrous place?
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Old 10-24-2009, 12:23 PM   #38
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If for no other reason, I think this is great because this will
prevent future companies going to govt. for a bailout.
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Old 10-24-2009, 01:58 PM   #39
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Maybe, but my air and water are clean. My house has never been robbed and I've never been mugged. Our borders have never been invaded. My mail always arrives at its destination. My food is safe to eat and my products are safe to use. Business runs smoothly due to contracts rendered enforceable by the courts. My retirement portfolio has generally been safe from fraud. I've never lost a dollar on my bank deposits. My car drives nicely over public roads and my public education has served me well . . .

I don't know what I'd pay to achieve all of that, but I think it is something north of $0.
I have to agree with you that our current Congress has spent money on public education and paving roads. Even roads that don't need paving.
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Old 10-25-2009, 09:13 AM   #40
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Today's Op-Ed piece by Frank Rich in the NYTimes is interesting... if only for the observation contained in the ending sentences:

Quote:
If Heene’s balloon was empty, so were the toxic financial instruments, inflated by the thin air of unsupported debt, that cratered the economy he inhabits. The press hyped both scams, and the public eagerly bought both. But between the bogus balloon and the banks’ bubble, there’s no contest as to which did the most damage to the country. The ultimate joke is that Heene, unlike the reckless gamblers at the top of Citigroup and A.I.G., may be the one with a serious shot at ending up behind bars.
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