Who Keeps Screwing Us Over?

I shouldn't be surprised by now. But I still was when I read the article this morning in the Washington Post explaining that the cap on executive pay has been removed from the stimulus bill. I knew what Congress was doing yesterday by bringing the Wall Street executives in and scolding them in public was a dog and pony show. But I had not realized how profoundly full of shit these politicians are.

They make a big display of yelling at the CEOs and then the very next day they quietly remove any cap on their compensation. These people are not on our side. This is why so many Americans are so damn frustrated. Everyone in power appears to be bought and paid for. There is a circle of people in DC and NY that keep passing the money around to one another and then come and collect it from us.

I want to know -- no, I demand to know -- who killed this provision? Who argued for taking this cap on executive pay out of the stimulus bill? Do we have a free and strong press in this country? Or are they in on it, too? If not, then find out who did this to us.

The constant non-sensical argument is that if we cap their pay, they won't want to participate in this system. Ooh, don't scare us now. So, we won't get the most incompetent and corrupt losers in America to participate in their own rescue? I'm shivering thinking about the possibility of losing out on the help of these geniuses.

We're wasting our time here. Just nationalize the damn banks already. Almost all of the top economists are now in agreement that we should take this step. The people who put the money in are the people who own the company -- that's how capitalism works. I'm a die-hard capitalist. I don't want the federal government owning banks for an extended period of time. But what's worse is to continue letting these bankers rob us of our money day in and day out while we sit around like fools.

We buy it, we own it. Kick the clowns out. Run it for a limited amount of time while we stabilize the credit markets. And then sell them off in the free market. Instead of begging the bankers to loosen up credit, we take the banks and do it ourselves.

At the very least, it is unconscionable to get rid of these pay caps. On what grounds do these people think they deserve millions of dollars for bankrupting their companies? How is that capitalism? That's not capitalism, that's cronyism. They pay the politicians, the politicians pay them. They have perverted the whole system.

No way. No way. No way. We have to stop this. If we don't, I guarantee you that we will look back and realize that the bankers actually did the most amount of damage and ripped off the system for millions more after the TARP program started and we let them walk away with all the money after the companies were bankrupt.

As Joseph Stiglitz says, they are bleeding the banks right now. It's a zero sum game, every dollar they take out is a dollar we have to put in. Why are we paying them for their incompetence?

My favorite joke is when people say if we don't continue to pay these clowns millions of dollars they will take their talent elsewhere. I literally laughed out loud after writing that. Please, have at it hoss. Take your talent wherever the fuck you would like.

Is it possible that the Obama administration is behind this move? Absolutely. First, Tim Geithner is a complete Wall Street guy. He believes in protecting the Wall Street bubble. That's why they were ecstatic when he was selected. And Obama himself is a guy who is instinct is almost always to be conciliatory. If Wall Street says this is necessary, he's going to want to reach out and appease them to get things moving. But not this time. This is a conciliatory move we cannot abide.

I voted for Obama, but I did not loan out my intellect to him. I can still make up my own mind on whether he is right or wrong. And if he is participating in this, he is 100% wrong.

One last thing, the banks say that part of the stimulus cap on pay might be retroactive and that's not fair because that's changing the rules (I love how they're complaining about fairness now). They say that the banks might pull out of these deals if we change this rule on them now.

First, great, pull out. Where are you going to get the money elsewhere? Nowhere. It's the world's worst bluff. And even if they do, they run out of money. We are forced to nationalize them and we arrive at a better result anyway. Please make our day and don't take the money.

Second, on the retroactive issue. As one of our listeners pointed out, if a bank makes an error and deposits some money into your account that isn't yours and you spend it, you know what happens to you? You get arrested! We have covered numerous stories like this on the show. The bank accidentally puts in an extra $100,000 in someone's account. They spend it and they go to jail.

Here we have accidentally put too much into the bankers' accounts. I know it's too much because they took $18 billion of it home in bonuses instead of spending it on the problem at hand. If they spend it after we notify them of the error, they get arrested. They have to give the money back. It's what they do to their customers all the time.

Now, that's my solution. But that's not even in the bill. We should get that $18 billion back. But instead all we're asking for is that they not pay their executives more than $400,000 a year for being the worst businessmen in the country. Here's what I know as a fact -- that is not too much to ask for.

And if our politicians claim that is too much to ask for, then they are either the most pathetic weaklings around or they are in on the heist. Either way, if they don't put this back in the bill, they gotta go. Democrat or Republican, I don't care. If they don't understand the urgency of this, then they are not for us.

Every day we wait is another day they "bleed the banks." If there isn't a popular uprising to stop these guys from stealing our money, then we deserve what we get. The old saying goes, a fool and his money are soon parted. Are you going to be that fool?

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Comments

[GatoPreto]

It looks like the bankers are being set up as fall guys. Think about it, the biggest account holders, they're the ones who tell the bankers what to do. The banker themselves are just managers, let's not forget it.

[ObjectiveRealist]

Well, I thought about it a little bit and the first problem I notice with your analysis is that it depends on the assumption that "the biggest account holders" have more money than the CEOs. Taking Citi for example, its notoriety as predator on high-risk credit card victims at usurious interest rates allows your assumption to be dismissed out of hand.

The bankers bought the Gramm-Leach-Bliley Act and the Credit Futures Modernization Act, and now it is time they paid for them. Nobody set up *them*, they set up the financial system but were too greedy to take their winnings and exit the casino. Now they can pay their debts or get their knees broken, figuratively speaking, like any other deadbeat who gambled, lost, and tried to skip the bill.

[FairTalk]

Thanks for this, Cenk!

We have been taken to the cleaners, pockets worse than empty, we are in debt big time.

I too would like to know who (all) is behinnd this. That is why it is so important to NOT make a deal with Madoff. We must have a grand jury, and a very very public trial, to flush out all the bandits!

[derWahrheit]

The puppet Obama may be optimistic. I think "there will be blood!"

[ObjectiveRealist]

Geithner might be a puppet but President Obama is a genius and nobody's tool.

[moneyman1]

C.U. great suggestion, however, it does not go far enough. We need to nationalize not only the banks but the big energy companies as well. Big oil, big coal and big railroads all have lots of our money and the capacity to hire lots of people. Obama doesn't have the stones or the inclination to do such a massive restructuring so we the people need to push it on him and the congress. Right now nobody is thinking like this because they don't see the next wave of trouble which is coming - the massive failure of commercial real estate. When that wave hits, people will be ready to accept any solution which provides relief and starts the engine of the economy humming again. Reducing energy costs and transportation costs with fixed rates would help spur manufacturing and productivity. Electrification of the railroads would boost construction spending while reducing oil imports. We need to reregulate the electric utility industry and push electrification on all industries based on base load nuclear power with gas powered topping cycle plants and renewables of wind and solar. We need a new generation of welders and electricians and ironworkers ans sheetmetal workers and carpenters - people who know how to work for a living - to rebuild America into a productive and efficient society. End the wild Wall Street speculation with solid investments in real plant and equipment and worker training for this enoumous task. Stop the get rich quick schemes of Goldman Sachs and

[TheBlackCat]

Great article Cenk. If it's available to you, I personally think the way to go right now is get your money out of banks and into local credit unions. They are MEMBER OWNED and most importantly NOT FOR PROFIT. That means you don't get all the hidden fees you have at banks, or if you do, those fees tend to be a lot less. They also tend to have lower interest rates on loans and higher interest rates on savings.

Credit Unions aren't perfect, but as they are member owned, they're no out to fleece you the way banks are. The main disadvantage is that there tends to be less branches. For instance in my home city there are a dozen branches of my old bank, but only ONE branch of my credit union. Still, to me, this inonvenience is well worth the pay off. I switched to a local credit union that my employer uses and have been extremely happy with the switch.

[derWahrheit]

You seem an insightful, intelligent individual. It's time you were introduced to Pierre-Joseph Proudhon.

[spartanmom]

Thanks, it is good to know where we come from

http://en.wikipedia.org/wiki/Pierre-Joseph_Proudhon

[LiberalForever]

We are toast. Face it. The Federal Reserve system, the greedy, out of control banks
and the criminals on Wall Street. The government is totally deaf to the needs and
the incredible hardships facing the public.

The New World Order is here. The USA is toast.
The only solution will be...

[Soulsurfer]

I know, you can't post it here, but the intent is true. Good post Cenk!

[rainbowwarrior]

People should start complaining aloud by writing and calling their Congressmen about this crap, to stop this.
The CEOs would abandon their corporate Gulfstreams for a day and appear at hearings and show some remorse, go back to stuffing their accounts with bonuses and incentives and remodeling their offices for millions with taxpayer money. When people criticize them for wasteful spending they get really incensed.
Why dont the government nationalize these banks or allow them to go bankrupt? After all propping up private companies and saving them from insolvency is not Capitalism it is worse than Socialism.

[ppitstop]

Amen, brother. It is time forthe government that we pay for to work for US, not for corporations.

[ConservativeHippie]

"These people are not on our side. This is why so many Americans are so damn frustrated. Everyone in power appears to be bought and paid for. There is a circle of people in DC and NY that keep passing the money around to one another and then come and collect it from us."
Has anyone here ever heard a little story about "taxation without representation"?
DON'T TREAD ON ME

[ObjectiveRealist]

Ron Paul predicted this crisis. Like others who said the banking system is worthless and destined to fall he couldn't predict the exact day, but this type of financial fraud was a major theme of his campaign, along with a non-interventionist foreign policy. He's worth a second look.

[TheBlackCat]

I'm no Ron Paul fan but I admit the man has gotten more than a few things right.

[Kassandra]

Old news everybody. The caps back on and tighter than ever.
It was on the front page thsi morning, so stop kvetching, OK? Pelosi and her loyal ban of Congresscritters saved the day, the stimulus and, perhaps, the country:
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/13/AR2009021303288.html?hpid=topnews

[CrankyCurmudgeon]

Just nationalize the damn banks already. WTF? Is Capitalism a damn religion? Where does it say in the Bible "Thou shalt exalt the money lenders above all else, even unto thine own destruction"? I think there's at least one modern religion whose leader had something to say about that, eh?

I, too, voted for Obama and - given the same circumstances - would do so again. However, just like Cenk, I have not abdicated my ability to think for myself. He must stop this BS. Who cares if these people leave. Start reviewing resumes. There are thousands of people who can successfully run a financial institution out there. In fact, I'm willing to bet the collective intelligence of the workers in these banks can run them just fine.

[Soulsurfer]

Actually, I think my mom could do a better job................

[Bob4]

This morning's NYT says Chris Dodd slipped tougher curbs on executive compensation into the bill. It prohibits cash bonuses to the 5 most senior people and top 20 highest paid in the company. Incentives would have to be in stock that don't vest until TARP is repaid. The Obama administration is apparently worried that it could cause a brain drain (what?), or that the companies may try to pay back public money faster (what?). The article mentioned the banks would no longer have to replace public capital with private capital, and that this could somehow remove an extra capital cushion and further reduce lending....

1. If they can pay the money back faster, great. I wonder if they will be able to. Isn't the reason they need it because they are insolvent? If they can pay it back, wouldn't that imply that they are able to meet whatever normal capital adequacy requirements are needed to be solvent? In that case they should be able to lend, or am I missing something?

2. If they run out of people to run their business, I can do the job. I'm not that smart, but I'm not that stupid either, and I would be willing for as little as $1.5 mil... heck maybe even $500,000.... Does the brain drain include an idiot drain? At least with me they'll get a cheaper idiot, and I might even do a better job...

[Volcanobonbon]

These bankers need enough compensation to put them in the new superclass of international elites. Otherwise how can the superclass depend on their loyalty in rigging the system to protect the privileges of the superclass? Duh.

So, if we want loyalty to someone else we would have to pay them like the class we want them loyal to. Obviously, the real solution is to take out all our money and put it in our local credit unions, and small, locally controlled banks. What don't we understand about too big to fail is too big? And requires that the vast majority of us pay protection money to the superclass?

[norkas]

There was a time when most banks were very prudent and those times will only come back with strict regulations as we need now.

Because someone is a known economist does not mean he has any commonsense but may of recieved great grades and top of his class and written some books.

Most of the economist have NO common sense. Tell how many ran a sucessful business of there own?

Big lawfirms have learned that someone who graduates with honors from Harvard law school means nothing after being burnt for many many years hiring lawyers that have no common sense and are a waste of time being over paid for doing research on cases.

Today Harvard Law school means nothing to big lawfirms and they are not at all impressed .

The same for economist that are skilled in writting, speaking and have no application in common sense to make very good business decisions.

I have met lots of good bankers but that was when there were laws on the books about lending money. These bank exextives pushed the loan officers to give loans that they knew the consumer could never afford and they pushed big time so they could packagethe loans and at times sell them.

They deserve sht because of what they did and it starts at the top. If they turn around the banks then they deserve bonuses again by making good and safe loans and bringing a profit back to thebanks

[Tidyus]

It is such a good article, it should be left in just to let these greedy guys know someone is on to them and to keep their feet to the fire. CEO salaries need to be capped everywhere. Much of this depression was brought on by the working class not making enough money to buy anything.