“1. The worst provision of the bailout bill was the cap on executive compensation. Many of these executives are already underpaid and they are suffering terribly as their stock options become worthless. One reason why some companies have not performed as well as they should have was that their executives were too distracted trying to make ends meet to focus on their jobs and they were worried about what will happen to them if they become unemployed. They are no doubt chilled by what happened to AIG CEO Martin J Sullivan when he resigned in July after AIG wrote down $20 billion in losses on assets linked to subprime mortgages. He got a measly severance package that only amounted to $47 million, which will be worth even less in 2009 dollars if the economy continues in the direction it’s headed. What incentive are executives going to have to work hard and pull their companies out of debt if we cap their compensation and how are we going to convince some poorly performing executives to resign if we don’t promise them hefty golden parachutes?
“2. Even worse, the bailout bill contained no provisions guaranteeing Christmas bonuses for Wall Street workers. Doesn’t anyone in Congress understand how Wall Street works? Telling Wall Street workers that Santa Claus might not come this year would be devastating for our economy, which depends on the infusion of cash it gets each Christmas as investment bankers spend their bonus checks buying condominiums and boats and indulging in lavish meals in luxury restaurants. How can we hope to get out of this economic slump if we do not guarantee the Christmas bonuses that keep our economy going?”
Can Happy Days be Here Again?, Jon Swift, September 30, 2008
No bail-out for the bozos.