'Obama to Announce Voluntary Speed Limits: Given that TMQ has been railing against big bonuses to CEOs and Wall Street types, you'd think I would be happy about the executive-pay limits Barack Obama announced Wednesday. The announcement got fantastic press for Obama -- our new president is the most gifted media manipulator since Ronald Reagan, and successful modern presidents have had media-manipulation skills. But the "limits" are not what they seem. For most firms that receive federal bailout money, the "limits" are voluntary. Golly gee whillikers, CEOs will voluntarily limit their own pay, won't they? Corporate executives don't need a presidential directive to place voluntary limits on their bonuses, they can do that on their own at any point. The "limits" apply only to firms that receive what the Treasury Department calls "exceptional aid," meaning most of the millions and billions being handed out as gifts to banks around the country will continue to come with no strings attached. So far, three firms have received aid classified as "exceptional" -- AIG, Bank of America and Citigroup. Guess what? AIG, Bank of America and Citigroup have been exempted from the limits. The "limits" announced by Obama would bind any firms that may receive "exceptional" aid in the future, but for now, bind no one.
Perhaps some companies will decide to comply for public-relations reasons. But it's disturbing that one of Obama's first major acts in office is classic Washington make-believe -- something that seems like a sweeping reform but actually is nearly toothless. If the country is to have the change Obama promised voters in his campaign, genuine reform is required, not more exercises in Washington phoniness. Plus, if the new president stakes some of his prestige on what seems like a dramatic decision and it turns out a year from now that CEOs easily evaded the seeming "limits" and stuffed their pockets with tax money anyway, Obama will seem an ineffectual leader.'
No comments:
Post a Comment