Axelrod Defends Circumventing Executive Pay Caps: Don't Want To Create "Disincentives" (VIDEO)

One of President Barack Obama's closest advisers defended on Sunday moves to help executives at major banks avoid restrictions on lavish pay, saying the administration did not want to "create disincentives" for these banks to participate in bailout initiatives.

"Understand that we are very committed, the president has a tough set of standards that we are refining to deal with this question of executive compensation," David Axelrod told Fox News Sunday. "It is an issue he talked about long before the crisis. But here is the point: on some of these programs we are asking financial companies to come in and help solve this problems by providing more lending, by buying up toxic assets and so on. We don't want to create disincentives and undermine the program. So we have to look very closely at this, making sure we are not rewarding people for irresponsibility, that firms that are getting extraordinary help aren't giving out huge bonuses. But we do need financial companies that aren't in great distress to help lead us out of this and partner with tax payers to help lending get going again."

The remarks come several days after the Washington Post reported that administration officials were "engineering its new bailout initiatives" in a way that would allow participants in the program "to avoid restrictions imposed by Congress, including limits on lavish executive pay." Legally, the administration says it is in the clear. Congress' restrictions apply to those receiving money from the government. But the bailed out firms are actually receiving money through special entities ("middlemen") set up by the government to funnel the money to these institutions.

Politically speaking, the administration has a tougher case to make. There is, as Axelrod acknowledged, a real populist anger with the salaries and bonuses of officials at these firms. And it seems unlikely to be diminished by the need to get other firms to help invest in the administration's toxic asset purchasing program.

UPDATE: A bit of mixed messaging on this front. Treasury Secretary Timothy Geithner, appearing on CBS' Face The Nation, seems to deny reports that the administration was trying to circumvent executive compensation rules passed by Congress.

"Our obligation is to apply the laws that Congress just passed on executive compensation and we're going to do that," said Geithner.

Comments

[TotalRecall9]

The Obama Administration doesn't even lie well. Considering they don't lie well, why not just do the best, honest, and moral job that they can? Instead, they are doing underhanded BS, like Bush, and nobody's buying it.

It has become clear to me that Obama's own "economic team" is instituting "trickle-down economics". Ironically, Obama campaigned against "trickle-down economics" and Geithner & Summers are doing it. Instead of creating many jobs now and maybe have modest growth for a couple of years, they decided to make the rich on Wall Street even more rich by creating another bubble. So, they are trying to create a short-term "false" high-growth situation and hope that the greater wealth at the top trickles down with more job creation. I don't think that it's going to work in creating jobs. In fact, it will cause unnecessary inflation when there are at least 25 million Americans now either unemployed or under-employed.

[TotalRecall9]

Only this time, it's not through tax cuts, but by welfare.

[PhilipTaylor]

Must See!

The SCAMS of the Banksters. This investigator of the Savings&Loan Scandal wrote a book on this Banking Crisis:

William K. Black said on Bill Moyers (paraphrase), "The reason the Executives have not been fired is that would SHOW LIGHT on the Corruption and the entire Banking System will be exposed!"

So they keep the scope of the Crime under cover because they think Americans could stand the TRUTH!

http://www.pbs.org/moyers/journal/04032009/profile.html

[PhilipTaylor]

AIG $47.73 Million to Politicians in lobbying funds over the last five years!

Dodd $280,238 in campaign cash over the last 20 years. $56,000 every four years
Schumer $111,875 over last 20 years. $22,000 every four years
Baucus $90,000
Obama $107,332 mostly for his presidential race.

Funnel all Political Contributions through a Government Contribution Cleansing and Funds Distribution Agency that uses strict formulas for allocating funds blindly to Politicians so their votes are NOT purchased! Fairness for New potential Members (No incumbent advantages for voting record)!

Right NOW Wall Street OWNS our Government Paying:

1. Average of $7.5 Million to each Senator every 4 years!
2. Average of $1.86 Million to each House Member every 4 years!

Main Street gets NO LOBBY SUPPORT and the Auto Companies can NOT compete with Wall Street so they get trashed while is rewarded for their FAILURE and CORRUPTION!

[LeeCalif]

How damning was that?

Totally damning.

[samerbayer]

what do u expect? He and his boss expect to join the crooked club after their term end

[jimrs6]

Axelrod is the political arm of the admin and ANYTHING he says needs to be viewed in that light. His job is to put a spin a realities that Obama faces now that he had to actually govern.

[ljc]

President Obama needs to get Axlerod and Geithner on the same page. They are contridicting each other. Two different stories about this on the same day and same page. What gives?

[hotwire]

He needs to fire them both!

[StephenJK]

Keep dreaming. Obama has already stated, in unequivocal fashion, that there is NO WAY anyone other than Geithner will be pitchforking the hundreds of billions of dollars over to the fat cat elites in this country. Period. Obama is not what everyone thought he was. Period.

[quiviran]

If Obama didn't intend for his administration to follow the law, he had a couple of choices. Veto the bill, and explain why or attach a signing statement, but the idea that he would pretend to accept the law while secretly circumventing it has echos of the recent past that are uncomfortable. He really needs to get Elizabeth Warren as Secretary of Treasury. I'd feel a lot less concerned about her motives than I do Geithner's.

[Dolmance]

Heaven forbid, we can't find qualified people to destroy every single financial instrument in the Western World while using their positions to loot their companies at the expense of their shareholders and then skim massive amounts of cash from taxpayer funded bailouts after everything gets flushed down the toilet.

These SOB's should have every bit of wealth they stole confiscated and put toward public spending in the hopes of avoiding a depression. And while we're at it, go after Rupert Murdoch's offshore corporate accounts acquired for the purpose of avoiding having to pay taxes.

[lj9283]

If I am a Senior VP at an investment bank, and through my 60-65 hours of work a week (not unusual for a banker in a trading shop) I am able to make my company $100 million in pure profit, and my base salary is $200,000/yr what should my compensation be at the end of the year?

[Jazzcomedian]

$250,000

[Tperl]

If your firm took bailout money $0.

If you are complaining about long work hours and low pay join a union.

Plus, sitting at a desk and making phone calls is not work. The single Mom waiting tables for 60-65 hours a week waiting on your selfish self, that is work. You deserve 0 sympathy.

[hotwire]

Don't forget about us single Dad's.

[lj9283]

Interesting that you would think that banking is about making some phone calls. Banking is one of the highest stress jobs, and bankers seldom make it through 20 years before they have to leave for their own well being. While I would never consider denigrating the work of anyone who provides for the welfare of their families, it does not do well to denigrate the value of work done by those who do other than manual jobs.

[quiviran]

I think I would like to know just how that happened, $100 million profit in one year would be a huge return. Generally, huge returns carry huge risks. If you appear to make that much money, you bear very careful scrutiny, maybe as much as Charles Keating or Joseph Cassano.

[Gib]

And if your bank became insolvent, and virtually in receivership, what should your compensation be?

[darthmaul]

You should go to jail, because you created nothing but Illusory profits, and robbed the taxpayers who are financing your "bonus." You may have worked 65 hours a week, but that means your just a hardworking crook.

[tjfxh]

I voted for President Obama on his message of hope. But apparently he was saying "hype" instead of "hope." My bad.

And about the promise of "change." There's an old Vietnamese proverb: The dungheap remains the same; only the flies change.

[BarackstarObama]

Not true, President Obama is offering hope and change.

[FrozenNorthObserver]

sure looks like Obullcrap to me.

[swo68]

"Hope and No Change" is probably more accurate.

[unite4change]

Tjfxh, if you can't see change, it's obvious, you're not looking for it.

[Realization]

Simple solution is a high marginal tax rate and a high estate tax. That will work better than trying to cap pay.

[walk0nwalls]

Why don't we just nationalize them and k*ll the executives.

[plaidsportcoat]

That WOULD be change. Wonder if any good might come of it?

[plaidsportcoat]

That would be CHANGE. Maybe it would help?

[Senzasord]

Why don't we all look at the way Andrew Jackson dealt with the Bank of the United States in the early part of the 19th century. He wanted to destroy the bank because he viewed it as a tool of the rich to oppress the average citizen. One of his tactics was to deposit U.S. funds into state banks instead of the Bank of the U.S. thus depriving it of capital and starving the beast.
We could do this now by taking the bail out funds and recapitalizing small state and local banks with huge influsions of cash. Then let the local businesses borrow from their local banks based on solid business plans instead of idiotic derivatives. It would also take the power away from Wall Street executerrorists and decentralize the financial industry thus breaking up that incestuous cartel that oversees our economy to their own liking. All it takes is courage.

[Weirdwriter]

Interesting. Thanks for sharing that, makes me want to go do some readin'!

It's true that smaller local and regional banks seem to be doing a lot better than their over-sized national/global counterparts.

But the big guys are so many, and have their fingers in more pies than during President Jackson's day, I wonder about the repercussions of a repeat action.

[Jazzcomedian]

Presidential historians and economists give Andrew Jackson very poor marks for that, and say the nation paid a tremendous price, as it caused a monetary contraction of 33.6% that lasted until well into 1837. In addition the Senate passed a resolution censuring him. He left the economy in crisis for Martin Van Buren who succeeded him. Jackson's economic management was considered a disaster.

[hotwire]

See enaid's comment below, watch the video, you might learn something. Quit being a follower.

[FrozenNorthObserver]

can anyone ever remember when a politician has gone against their top corparate contributor?

[motodude]

What he really means is that the US government is not in a position to control the banks because they are more powerful than our government. The financial sector is at war with the rest of the economic sectors and with the government. Guess who is winning. The ones who control the money are winning and the government cannot reassert its authority because Wall St will pull the rug out if they don't get their way.