Adult Supervision is Returning to Wall Street

So says our Representative Brian Baird and I quote him from a link to a story in my earlier article:

Baird said the legislation also will prevent executives who presided over the financial crisis from reaping huge salaries and bonuses.

“Any company that chooses to participate in the program will not be able to offer their departing executives exorbitant severance packages,” he said. “In companies where the government is making a direct purchase, it will also place strict limits on executive salaries and will end the tax deduction for executive salaries over $500,000. For the first time in a long while, adult supervision is returning to Wall Street.”

And as any 6th grader could have anticipated back then, Seeking Alpha has an article entitled, For Shame: $50 Billion of Bailout Funds Already Designated for Year-End Bonuses, which states:

As if the economic bailout by U.S. taxpayers isn’t enough to make you sick to your stomach, new information has come to light that several banks are planning to pay billions of dollars in year-end bonuses from the bailout funds they received.  Investigations are beginning into the nine banks that took in the first $125 billion -- the same $125 billion that was supposed to be used to unclog the credit system which was preventing banks from providing much needed funds for individuals and businesses.

There are many feathers in a ruffle over this and New York Attorney General Andrew Cuomo and several congressmen are furious that over $20 billion has already been earmarked as bonus funds for management and employees. Unbelievably, that is just the estimates from Goldman Sachs (GS), Morgan Stanley (MS) and Merrill Lynch (MER). There are six more banks that are also working on similar heists.

Here is their rationale for using that money: It is reported that the financial industry pays base salaries in the range of $80,000 to $600,000 and apparently that is simply not enough to keep some of the best and brightest working to keep their companies profitable. It seems that if they were paid only this meager amount, the company would risk mass defections. That would be a real problem…or would it?

Representative Baird, did you REALLY think that lowering the deductibility of executive compensation to $500,000 or $5 for that matter would REALLY stop the robber barons from stealing our (the taxpayer’s) money?  If so, given what is now occurring, do you think you continue to be qualified to represent us (the taxpayers) in Congress?

When is adult supervision going to return to Washington’s 3rd Congressional District?

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