U.S. cuts pay at bailed out firms

[MichaelB]

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Originally Posted by ziggy29 Some of them have tried but the government wouldn't let them.

Only when the capital wasn't sufficient.

[Kwirk]

I support the effort but I think it's a mere nod in the direction of improved corporate governance. As far as I know corporate execs get to nominate the board members who will determine their pay packages. What could be wrong with that?

[kumquat]

Quote:

Originally Posted by . . . Yrs to Go Our borders have never been invaded.

Quote:

Originally Posted by ziggy29 I take it you weren't at Pearl Harbor on 12/7/1941.

I doubt if either of you were alive in 1812.

A bit of humour about it:

YouTube - War of 1812 - Three Dead Trolls in a Baggie

[Independent]

Quote:

Originally Posted by Running_Man In this country there is a growing lack of respect for rules and individual responsibility and this trend is worsening, overwhelmingly individuals are learning how to work the system best to their advantage and look for the government to constantly change rules for their inidividual goals. Punishing the TARP company executives is just another manifestation of this process.

I agree with the first sentence above, but not the second. It seems to me that limiting compensation is intended to push for some measure of "individual responsibility". Without the limits, the execs make huge amounts of money when their gambling pays off, and, when they lose their bets the gov't bails them out and they continue to make huge amounts of money. At least we're trying to say that the execs can't completely avoid sharing the pain they've caused everyone else.

I'll agree (see earlier post) that we need long term reform and that's more important then these compensation limits. We should get ourselves into a postion where nobody is too big to fail.

[ziggy29]

Quote:

Originally Posted by Independent Without the limits, the execs make huge amounts of money when their gambling pays off, and, when they lose their bets the gov't bails them out and they continue to make huge amounts of money. At least we're trying to say that the execs can't completely avoid sharing the pain they've caused everyone else.

Well, as I see it this is sort of a false dichotomy. I guess it logically follows once a financial institution has been "bailed out" because it was deemed too big to fail. But in reality, if a business makes bad bets, the business should fail -- not receive taxpayer largesse.

Quote:

We should get ourselves into a postion where nobody is too big to fail.

Absolutely right. I don't like placing arbitrary limits on the ability of a business to grow and produce wealth for shareholders, but in reality if a business becomes so large and pervasive that its failure can seriously damage the entire economy, "too big to fail" becomes "too big to exist." Had this been the philosophy previously, we wouldn't need to even discuss bailouts. And if these businesses knew they wouldn't be bailed out, maybe they don't make such reckless business decisions.