Feb 5, 2009 Political
Though Democrats like to portray the the Republican party as the party of rich people the left has quite a number of wealthy folks and they write big checks for Democrats. In the last election cycle Barack Obama received a heck of a lot more money from Wall Street than did John McCain and Democrats in general fared better than Republicans.
Today Barack Obama bit the hand that feeds him by limiting the salary of executives to half a million dollars if their companies received bailout money. I certainly understand the sentiment but there are issues here that I am having some trouble with.
I believe that if this is going to be a condition then it should have been spelled out in the bill when it was signed. It could have easily stated that the CEO of any company that receives bailout money will have his salary reduced to [whatever number] by whatever date. Doing it after the fact just looks like bad practice. Can Obama add stipulations like this?
Another thing I have a problem with is, how can the president or any other government official regulate the salary of employees in a private business? What part of the Constitution gives Obama the legal authority to decide what a person in a private company can make? I understand that the government is providing them bailout money but it is also my understanding that the money is a loan to the companies. As I stated, if it was not spelled out as a precondition, how can he add it now? Isn’t that a legislative function?
The limit on executive salary might also hurt New York. They are complaining that many good money managers might leave for better jobs if their salaries are cut per Obama’s orders. The first thing to ask is, if these are such good money managers why did their companies need bailouts? The second thing is, where are they going to get a better job in this economy, especially in the financial market?
One way this might actually hurt New York is the drastic drop in income tax revenues. A CEO making 10 or 15 million dollars a year certainly pays a lot more in taxes than one who makes half a million. The amount of tax revenue to New York might drop quite a bit.
I am not in favor of CEOs getting huge paychecks when they are the ones who ran their companies into the ground. However, I am in favor of doing things ethically and fairly. That means ensuring that Obama has the authority to do this and if he does not then getting it done correctly before imposing it. Also, bailout money cannot be forced on any institution. The rule must be, if they don’t want it then they cannot be forced to take it.
I have no sympathy for any of the CEOs and I was not in favor of any bailout/stimulus that has come along. I feel the companies should succeed or fail on their own merits and not be saved on the back of the taxpayer. The rules about salary and the bailout money are nothing more than huge government intrusion.
Government intrusion is what caused this mess in the first place.
Obama can rail about these people and their excessive salaries but I am willing to bet they paid their taxes…
I also bet the cap on salary will be challenged in court and I think Obama will lose the case.
Anyone taking bets on whether he will get as much money from them when he runs for reelection.?