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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%
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U.S. cuts pay at bailed out firms
Old 10-22-2009, 11:34 PM   #1
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U.S. cuts pay at bailed out firms

An article on Yahoo today says that the Obama Administration is telling the companies like AIG, GM, Bank of America who were bailed out and have not yet repaid the loans that they must drastically cut the pay of the top 25 execs at the firm. Bank of America said the ruling would put it at a disadvantage in competing with companies not under the pay czar's thumb. "People want to work here, but they want to be paid fairly," said BofA spokesman.

What does everybody think about this?
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Old 10-23-2009, 12:02 AM   #2
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The partially taxpayer-owned companies can do what Goldman did - repay the loans.
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Old 10-23-2009, 01:54 AM   #3
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Fair is such a loaded term, especially when it comes to pay. Since they are essentially government employees, is it fair that they get paid more than other government employees, say in the services?
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Old 10-23-2009, 06:38 AM   #4
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I needed another option! It doesn't go nearly far enough... NO ONE in a bailed out company (entity) should make more than old 'exec pay cap' (a Congressman's pay)...

Further anyone making more than exec pay cap in the two years preceding a bail out (OR bankruptcy) should forfeit the excess. Including any and all 'bonuses', etc. That would put a big hole in those 'golden parachutes'.

IF self-regulation worked, bail outs would NOT have been necessary! This would definitely provide some strong incentives to appropriate management and NOT creating these 'crisis' situations in the first place...

While I'm dreamin'... It would also be nice, if those who committed fraud and those who encouraged that fraud were fined and prosecuted to the fullest extent of the law.
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Old 10-23-2009, 06:48 AM   #5
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Fair is such a loaded term, especially when it comes to pay.
Like in "fair market value." The banks are correct in this case. I don't see how the worth, to a particular enterprise, of an executive can be determined by an outside committee. I see many Dragons down that path -- too many unintended consequences are possible/probable. (If the Government were to determine the rates of pay at ALL banks, I might feel differently, however.)

BTW, I don't understand the "middle" choice. Like a "gut" feeling? Or just "warm & fuzzy"?
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Old 10-23-2009, 07:06 AM   #6
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Sounds fair to me, any company I've ever owned or run I decided what to pay my employees, in this case the taxpayers essentially own the companies, or control a voting majority, so why shouldn't the "owners" dictate the pay?

This stuff makes me so mad, companies that are essentially bankrupt, paying millions of dollars to the very people that led the companies into bankruptcy (and by the way came close to a causing a complete economic collapse), crying poor because the "bad government" is cutting their pay...boo hoo.

Don't like it? Go find another job...same thing I use to tell my employees.
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Old 10-23-2009, 08:04 AM   #7
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I think those employees should just be glad they have a job in these difficult economic times. They should be willing to accept minimum wage. After all, the government has extended a helping hand to these banks and auto companies, so they should return the altruistic gesture by volunteering to work for minimum wage. They should be forced to work for the benefit of their employers and their shareholders at whatever rate the government sets because that is fair.
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Old 10-23-2009, 08:54 AM   #8
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I don't agree. Gov't should butt out. This sets a bad and dangerous precident, IMO.
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Old 10-23-2009, 09:00 AM   #9
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I agree. Those "private companies" stopped being private when they accepted government/taxpayer money. The government is now a major stockholder in them and therefore should have a say in how they're run.

That said, I think the bailouts were stupid to begin with.
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Old 10-23-2009, 09:04 AM   #10
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The government is now a major stockholder in them and therefore should have a say in how they're run.
Is that true? "We" purchased stock? Then shouldn't there be a Stockholder's meeting in which this issue is brought up for vote (a "say")?
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Old 10-23-2009, 09:08 AM   #11
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In general I have no problem with the concept that if you want the government's help, it comes with strings attached that you should agree to accept if you want the bailout.

Having said that, the fact that (a) some of these businesses were *forced* to take the bailout and (b) terms are being changed and created after the fact is problematic. How would you like to take a loan where the lender was free to legally change the terms of the contract after the fact?
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Old 10-23-2009, 09:19 AM   #12
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How would you like to take a loan where the lender was free to legally change the terms of the contract after the fact?
... and retroactively.
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Old 10-23-2009, 09:35 AM   #13
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Actually, I have a bigger problem with MY money being 'lent' without sufficient collateral or repayment schedule... Credit Cards do the changing terms thing constantly and your option is to either accept it or go elsewhere. When you take or get money from the gov't - you're subject to changing laws and legislation. Option - don't take money from the gov't... Paying millions in bonuses to failed execs is obscene. Capping compensation at the level of a congressman's is exceedingly generous for someone unable to profitably run a company...
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Old 10-23-2009, 09:44 AM   #14
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The best government is the least government. However, the free market forces have been disrupted by the bailout. Therefore, I think the government is justified in forcing changes, since they (we taxpayers) are invested in the bailout companies.
OK... it also feels good to cut the pay of those rascals.
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Old 10-23-2009, 09:53 AM   #15
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OK... it also feels good to cut the pay of those rascals.
And it would feel even gooder if the pay was cut of those Weasels who thought up and voted in the bailout and are now making matters worse. They don't seem to be any more competent than the banking executives.

Everyone here keeps skirting the issue but if these people are so bad in their jobs, how can paying them less make them more capable? (Yeah, I know firing a Weasel is only possible every four or six years but those others... )
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Old 10-23-2009, 10:10 AM   #16
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Article on CNN today...

Who cares if Wall Street 'talent' leaves? - Oct. 23, 2009

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Still, we say Godspeed to this "talent." After all, the traders and suits in the corner offices don't exactly have an unblemished track record. In 2008, Citigroup, BofA and Merrill Lynch (since acquired by BofA) posted a grand total of $51 billion in losses.
Bolding mine...
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Old 10-23-2009, 10:10 AM   #17
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Given the market I think paycuts are not going to result in a substantial loss of good people. How talented are any of these people? Talented at what? And people are more replaceable than some think. We better have strings attached when giving government money.

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.
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Old 10-23-2009, 10:13 AM   #18
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In general I have no problem with the concept that if you want the government's help, it comes with strings attached that you should agree to accept if you want the bailout.

Having said that, the fact that (a) some of these businesses were *forced* to take the bailout and (b) terms are being changed and created after the fact is problematic. How would you like to take a loan where the lender was free to legally change the terms of the contract after the fact?
The ones listed were not 'forced'... they are the sick ones... they NEEDED the money to stay alive... the ones that were forced have already paid back the money and are now about to pay our record bonuses....
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Old 10-23-2009, 10:37 AM   #19
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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.
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Old 10-23-2009, 10:48 AM   #20
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The ones listed were not 'forced'... they are the sick ones... they NEEDED the money to stay alive... the ones that were forced have already paid back the money and are now about to pay our record bonuses....
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.
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