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

[Independent voter]

Geither said on the talking heads today that the administration is not helping companies circumnavigate the restrictions on executive compensation.

So why would Axlerod defend an action that Geithner says isn't happening?

Things get curioser and curioser in the Bankers Party - formerly know as the Democratic Party

[DrPneumann]

Both parties are involved and playing us all. The "good cop"/"bad cop" scheme is being exposed as both parties involvement against the American public is finally being uncovered.

[Inquisitr]

Money gets to all of them. Praise the idea not the person, not all Obama does is pure gold.

We have to stand up and scream a bout this till they understand we are in charge, not them. They serve us, not the other way around.

[plzchuteme]

Boy, I saw this coming. No matter what the people demand, and no matter what congress may try to do to appease those demands to reign in the obscenity that is the corporate compensation system, those same robber barons will be one step ahead is crafting new ways to support the lifestyle to which they have become accustomed to that will fly under the radar. What's next; Treasury "bag men," leaving sacks of laundered currency under a park bench for the downtrodden CEO to pick up?

Then there is the whole extortion concept. "Don't tread on me, or we just may not cooperate with the plan to try and correct what we screwed up to begin with." How about this: "Cooperate with the administration or we replace you, investigate you, prosecute you, and then throw you to villagers assembled outside your castle."

[Trustandalwaysverify]

There is one thing people who voted for, or against Mr. Obama have in common.
His administration is lying to us all.

[StephenJK]

BINGO!

[cantkeepmedown]

Looks like the community organizer in chief is just one teleprompted fiasco away from being just another wall street president.

clinton, bush, obama - three amigos when it comes to financial policy.

[mikekc]

I guess Axelrod is drinking the kool-aid now too. Can't blame him, if you are going to live in a nation ruled by Wall Street Oligarchs you might as well toe the line so you can cash in when you leave the White House. The question is in the future will David Axelrod become a:

1) Paid "advisor" to a hedge fund or major bank
2) Board member of Citi
3) Board member of AIG
4) Board member of whatever industry is in trouble at the time that needs bailouts

When union workers are forced to take pay and benefit cuts - where are the people in Washington saying we can't do that because it will create a disincentive for them to go to the factory every day?

[Beowolf741]

Great point. I hope they have a better answer to this than that. If retirees end up in worse shape and don't get what they were promised and any big executive gets a golden parachute big enough to support dozens of people in retirement what does that say?

[SamKnause]

I think it says exactly what it was meant to say, we the people don't matter. They don't care what we think, they don't care what we want, they don't care what is best for we the people. How many more different ways can they keep telling you until you get it. We don't matter. We are not rich, therefore we do not matter!!!!!

[slarabee]

How do you go about slowing down a runaway freight train?

[ConservativeHippie]

Throw 300 million Americans under it.

[StephenJK]

You effing rock dude.

[JackND]

This is one issue in which I side with Congress over the White House.

And this is a terrible detail for the Obama administration to be on the wrong side of.

[naschkatze]

I don't like to play "me too" on the blogs too often, but me too.

[Tom Hunter]

I see. Since the Obama Administration is dealing with bastards in Wall Street, people who are unhappy unless their fannies are being smooched with lavish gifts, we have no choice but to appease these beasts. Yes, I agree and now understand the rationale. However, it does not change the fact that these Wall Street Bastards justified their lavish pay packages the past few years on the basis of the alleged profits that we now know are illusory. So, yes, they should be allowed now to get their greedy blood money. Yes, they should be encouraged to participate in the process today in which every investor takes a tiny bite of the Toxic assets and thereby we all get it eaten without any individual getting a toxic dose.

Yes, too, we should run a fleet of investigations of those Wall Street Bastards and claw back every ill-gotten dime. Yes, that's right, I said "claw back". I think the operative phrase for all these Thieves in Wall Street should be: haircut. Each and every one of them should be forced to take a "haircut", which means, lose money.

[go4thegold]

Axelrod has suddenly become very mealy-mout­hed... That usually means he parsing his words in a dishonest discourse. I'm saddened to see him try to defend the defenseless notion that companies wouldn't want the money from the Goverment. What's their choice? They'll have to fold. And you get no compensation when you're company goes under -- so wise up. Don't lie, Axelrod. D.

[gorgol]

Just today...on Face the Nation, Geithner said that the Washington Post Story was not true....al­l limits and restrictions demanded by congress will be followed. So, where is the truth??

[JackND]

which doesn't explain Axelrod.

[lacrosse]

Words, just words.

[DrPneumann]

All part of the elaborate SCAM against the American public.

Don't believe me?

WATCH:

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

YOU CANNOT FATHOM THE AMOUNT OF FRAUD PERPETUATED AGAINST AMERICAN CITIZENS BY THEIR OWN COUNTRYMEN.

[mightyhead]

perpetrated - perhaps perpetually perpetrated.

[gorgol]

Excellent.­.a must see for everyone..

[Hank007]

This is a great interview. One oft overlooked point: the 'no look' loans to which he refers, at least where I live, required a credit score of over 800, i.e., they were for rich people looking to buy second and third properties as investments. Despite what many say, it was not poor people getting in over their head. (I was actually approached about getting both and ARM and 'no look' when I was home shopping. The mortgage broker was an old college buddy.) It was the rich speculators covering for middle class and less rich speculators.

[StephenJK]

Bill Black is really on point in all of that interview. Especially when Moyers pointed to the Geithner bit about never being a regulator.

[truegreen]

What? According to the NYT David Alexrod was fighting Geithner about this mess? now, he's changing his tune?

[naschkatze]

Geithner unfortunately won.