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

[naschkatze]

"Disincentives"? I thought we were through with double speak after the last administration, Mr. Axelrod.

[ConservativeHippie]

Nope..."co­ntinuation of gov't"...

[rh654]

While I voted for Obama - I am becoming less enchanted as time goes on and things like this just fuels my skepticism­...

[patrickgarret]

You aren't paying attention. He's done amazing work considering the MASSIVE challenges no president has faced before.

[ConservativeHippie]

"You aren't paying attention.­"
He's just continuing the policies of Bush. He's got profit whores advising him. He's in over his head and realizing he can't do the things he promised because his "bosses" won't allow it.

[FrozenNorthObserver]

Lad you would be siding salesman's dream come true.

[StephenJK]

They have two types of shampoo at the holiday inn. I can see it's working on you. It's working, Obama's got you and 100s of million just like you. Not me. Eyes wide open.

[veracity]

The continuing Tragedy of Barack Obama's Stockholm-­syndrome-e­sque subservience to his FAILED, ENTITLED, CORRUPT banksters continues to unfold.

This horrifying wreck is like watching the "file-gate", "Vince-Fos­ter-Gate", "Whitewater", "Lincoln-bedroom", and "Monica-im­peachment" scandals (many of the Clinton-era 'scandals' were FAUX or FAKE scandals..­. but they did their job in prepping the way for the Monica IMPEACHMENT, and subsequent THEFT of election 2008 from the hapless Al Gore) -

This horrifying wreck - of watching President Obama's clueless & hapless (and arrogant) SUBSERVIENCE to his banksters unfold - is like watching ALL the above Clinton "scandals" (and, yes, FAKE "scandals") erupt in the FIRST THREE MONTHS of the Clinton presidency in 1993....!!

....and it is ONLY GOING TO GET WORSE, as Republicans finally find a way to TAR and SMEAR Obama for CORRUPTION,
(while still giving their bankers & financial powers & wealthy "core of supporters" more freedom to continue DEFRAUDING the government (by making tax-havens & tax-cheating easy) , and STILL giving TAX-CUTS to wealthy.

With EVEN AXELROD now WHITEWASHING the insane entitlement, if not abject corruption, of the Obama Summers/Ru­bins/Emanu­el GOLDMAN-SACHS & "investment bankers, ONLY!" economics team, it is like the Obama crew HANDING Republicans MILLIONS OF DOLLARS to HELP them find that Holy Grail !
(of BASHING Obama's banksters for corruption, while endorsing same in GOP wealthy donors.)

[emailers2]

Obama will likely lose the democratic majority with these policies.

People are tired of all Goldman and Wall Street all of the time. Obama was elected because he proclaimed that he represented main street. He has failed in his mission. He has appointed to his team the very people responsible for this mess.

[Gib]

Surely this was not inevitable. He had a clear invitation from the people to tell them the truth, and he ducked it.

[emailers2]

What Congress can not give away to the wealthy via the tax code they give away in the bailouts.

Look at last week's vote by some D's to relieve the top .02 of the population from estate taxes. This means that at least some of the estate's assets will never be taxed and wealth will continue to be consolidate in the hands of the few. Unreal, gross bailout spending and more giveaways to the rich.

It appears that the only difference between the D's and the R's is the rate of the giveaways. Among the D's that voted for the estate tax amendment was liberal WA's Senators Cantwell and Murray.

Add this to the new mark to market rules and one must ask what's the difference between the parties?

[ConservativeHippie]

No difference. Demopublic­ans...they play off each other and WE pay the price.

[emailers2]

Demopublicans, good name.

[emailers2]

http://www.businessweek.com/print/magazine/content/09_15/b4126020226641.htm The loopholes in Geithner's Plan.

We are constantly told that the credit markets are frozen and the toxic assets must be off loaded on the taxpayer in order to stave off a national and global financial collapse. Assuming that the credit markets are frozen and the remedy is the transfer of the toxic assets, then what other incentive would anyone need to assist in the thawing of these markets? If the situation is so dire, then wouldn't saving the financial markets be enough of a benefit / incentive?

Do the so called private investors need any incentive greater the saving the financial system from collapse? Would they not suffer in a financial collapse? Maybe the answer is simple, this is yet another scheme to transfer wealth from the taxpayer to the Uber rich.

[Artamentous]

Where are these people going to go if they don't get massive bonuses? That's right no where.

[Gib]

Precisely, they don't need any incentives beyond keeping their jobs.

[eugenegerard]

Simple. NATIONALIZE the FED. Print your own money. Why are we going to bankers for loans that they charge us interest on? It's a scam.

[ConservativeHippie]

EXACTLY!
END the FED!!!

[Trolmaster]

This isn't the "change" we heard about during the campaign, but same old same old.

[Eyeswideopen1]

at least you got half of your handle right.

[arkansasgirl]

And I thought Axelod was on the the side of the American people. But he, to, is now on the side of enriching the Wall Street greed-mongers that got us into this mess. Sigh, I give up on all politicians. They are all untrustworthy.

[Gabblog]

Axlerod and Emanuel are the new Rove...

[ConservativeHippie]

Damn, 'em's fightin' words...

[ConservativeHippie]

Now you're getting it. The Demopublicans don't work for us. They keep us divided to maintain their power.

[jeremyemilio]

Ummm... Axelrod is a big biz ad exec. He's s l i m e and he always was. A useful "branding" expert if you're running a campaign but he has no business being part of the administration.

[Gib]

Modern US politics is continuous fund-raising and campaigning.

[lacrosse]

No one is on the side of the American people. We are on our own. Tax Day Tea Party's are not partisan, but American. Join one.

[ConservativeHippie]

Good post.
The movement started out non-partisan but the Republicans have tried to hijack it at every turn. Let's not let them.

[Chumleysmom]

Not partisan? No more so than Fox News is partisan.

[longfeltwant]

Party's what?

[DestinationsUnknown]

I wonder-

When you appoint/elect a ‘C’ student for your president you get a ‘C’ nation. I guess when you have a citizenry of ‘C’ mentality-What can we expect?

Who in this 'C' state understands Global? Globalization? Global Economy? Global anything? Global Bank?

That said when was the last time the US was involved with a Global Financial Crisis?

The fact that Americans do not even make the top 25 in world ranking for education is proof that ‘C’s’ don’t cut it.

Relax you 'Country First' voters....­..pick up a book would you please? Educate yourself a little, too difficult to do? Read and think on your own?

Isn't it obvious too many Americans have been left behind already? Shall we continue to follow as blind sheep as we have for the last decade? What is your resolve to the GLOBAL WORLD? Or maybe you think we never made it to the moon!

[ConservativeHippie]

"Educate yourself a little, too difficult to do? Read and think on your own?"
"Throughout human history as our species has faced the frightening, terrorizing fact that we do not know who we are or where we are going in this ocean of chaos, it has been the authorities; the political, the religious, the educational authorities who have attempted to comfort us by giving us order, rules, regulations; informing, forming our minds their view of reality. To think for yourself you must question authority.­.." Timothy Leary
WAKEUP!!!

[StephenJK]

That is a GREAT Leary quote and something innate inside of a lot of us. And those of us who do question authority are branded as "dysfunctional". My girlfriend is one of the rules followers at all costs. However, I've woken her up a bit in the 5 years we've been together and now she has her eyes wide open. This Obama phenomona has taken authoritative deception to all new highs. The government we expect to protect us lets rocket fuel get into baby formula, lets bunk studies on the benefits of fluoride poison our water, food supplies poisoned on a regular basis and our education system is absolutely worthless. People better start educating themselves with an open mind and a thirst for knowledge. We are all capable of so much more if we just pay attention.

[Hank007]

It's simple: if your bank is solvent, don't take tax dollars, pay yourself what you want. If you take taxpayer welfare, you have to follow rules, like all welfare recipients.

[vagabondvet]

Executive pay is so high because of the inflation caused when Nixon closed the gold window in 1971. Prices have gone up, profits have gone up, but wages have been more static. Inflation hurts the middle class more so than the rich. We need a free market with sound money to fix the rich-poor gap.

[GardenerNorCal]

I have a really hard time buying into retention bonuses, when union workers are expected to sacrifice pensions and health care. And in a time when so many are losing their jobs I don't think anyone is irreplaceable.

I say show these people to the door the same way the average worker has been.

[underoath]

I know this makes everybody mad but how productive is it to be pissed at bankers when we need these people and the investors that come with them to help us by buying up the toxic assets and helping the banks start lending so companys can hire workers and the economy picks back up!

[quiviran]

The toxic assets were created in the minds of the financial industry. They are not ASSETS, there is nothing there but paper and the faith that the paper means something. It does not mean anything. Let the banksters un-create them.

[ConservativeHippie]

The "economy" as it's reported to us by the propaganda arm of the gov't, MSM, is akin to the accounting reports of ENRON.
We need LOCAL banks to support LOCAL businesses so they can hire workers which will strengthen our LOCAL economies, which are real and suffering because of all the profit whores in DC and on Wall St.

[maxfax]

Plain wrong, fire the CEO's, fire the bankers.