Wall Street Breakfast: Must-Know News [View article]
Prudent Man - - -
Good point. I believe that during the TARP "disbursement" phase, all executive salaries should have been capped at some nominal level, say $300,000 per year max per individual, and some limit on the total for all executives within each company. There could be a formula for resurrection of higher compensation during the "repayment" phase. This applies incentives for "rehabilitation" as well as inflicting some level of pain on the perpetrators.
Some history: Lee Iacoca worked for $1 a year during the Chrysler rehab project. A cut to $300,000 (or less) allows the fat cats to still make enough to pay the mortgage on their mansions and second homes and to buy groceries and personal necessities. Tough if they have to temporarily give up their domestic servants, lurxury vacations and third and fourth status-mobiles. If they don't want to work for $300,000 per year they can leave. There are plenty of qualified (maybe more qualified) people in the finance world who would work for that and for a better future.
On Nov 17 08:14 AM PrudentMan, CFA wrote:
> In my fifty years of professional investment experience, my intuition > is that governments should be minimal and usually are part of the > problem instead of the solution. It is obvious in this "crisis", > which is actually not as serious as the economic situation of the > seventies when the people of Kansas had to bail out New York City, > calls for less government intrusion rather than more. > > When people are told that any government agency is going to solve > their problems those people have a lack of a sense of reality. In > the case of derivatives and leverage the government could have easily > ameliorated the risks by raising rates and Congress should have given > the SEC the tools they need though I believe they already have those > tools but, for political reasons, failed to take away the punch bowl. > After all, the member of the House of Representatives run for reelection > every two years and they like bull markets and never ever want to > decrease the money supply. > > If the Administration would have announced in 2007 that the Free > Market would have to clean up any messes it got itself into the markets > would have corrected accordingly and quickly. Now everyone who made > a stupid, greedy or both mistake is waiting for some government organization > to bail them out. The line continues to lengthen and the G-20, beings > a political organization, is clueless as to the ability of markets > to correct their own mistakes.
Wall Street Breakfast: Must-Know News [View article]
Good point. I believe that during the TARP "disbursement" phase, all executive salaries should have been capped at some nominal level, say $300,000 per year max per individual, and some limit on the total for all executives within each company. There could be a formula for resurrection of higher compensation during the "repayment" phase. This applies incentives for "rehabilitation" as well as inflicting some level of pain on the perpetrators.
Some history: Lee Iacoca worked for $1 a year during the Chrysler rehab project. A cut to $300,000 (or less) allows the fat cats to still make enough to pay the mortgage on their mansions and second homes and to buy groceries and personal necessities. Tough if they have to temporarily give up their domestic servants, lurxury vacations and third and fourth status-mobiles. If they don't want to work for $300,000 per year they can leave. There are plenty of qualified (maybe more qualified) people in the finance world who would work for that and for a better future.
On Nov 17 08:14 AM PrudentMan, CFA wrote:
> In my fifty years of professional investment experience, my intuition
> is that governments should be minimal and usually are part of the
> problem instead of the solution. It is obvious in this "crisis",
> which is actually not as serious as the economic situation of the
> seventies when the people of Kansas had to bail out New York City,
> calls for less government intrusion rather than more.
>
> When people are told that any government agency is going to solve
> their problems those people have a lack of a sense of reality. In
> the case of derivatives and leverage the government could have easily
> ameliorated the risks by raising rates and Congress should have given
> the SEC the tools they need though I believe they already have those
> tools but, for political reasons, failed to take away the punch bowl.
> After all, the member of the House of Representatives run for reelection
> every two years and they like bull markets and never ever want to
> decrease the money supply.
>
> If the Administration would have announced in 2007 that the Free
> Market would have to clean up any messes it got itself into the markets
> would have corrected accordingly and quickly. Now everyone who made
> a stupid, greedy or both mistake is waiting for some government organization
> to bail them out. The line continues to lengthen and the G-20, beings
> a political organization, is clueless as to the ability of markets
> to correct their own mistakes.