GatewayRedbirds.com

Congressional efforts to impose stringent restrictions on executive compensation appeared to be evaporating yesterday as House and Senate negotiators worked to fine-tune the compromise stimulus bill.

Provisions to impose a penalty on banks that paid hefty bonuses and to cap pay at $400,000 for all employees at firms applying for additional government funds did not survive the compromise, sources said.

The situation was in flux last night, but provisions in the Senate bill that called for a ban on bonuses for all companies receiving government funds also appeared to be headed to the chopping block, congressional sources said.

Tear Down Wall Street
The survivors who appeared before Congress are 'too big to fail.' But guess what: They're failing.

With a couple of possible exceptions, these financial behemoths can't be allowed to survive and securitize us to the brink again, only to have to be rescued because they're too important to the economy to be permitted to go bankrupt. This is still the heart of the crisis—the problem that President Obama's stimulus package and Treasury Secretary Tim Geithner's financial plan don't even touch. If it weren't for the fact that too many of these banks are too big to fail—"systemic risks," in the jargon—we would have been through a lot of the worst already. Bankruptcy and oblivion is supposed to be the fate of market players who make bad choices. That's how capitalism works. The system gets cleaned out, the survivors deservingly pick up their failed rivals' business and get richer, and the economy comes back to life quickly. But that's what is not working now. Oversize screw-ups like AIG and Citigroup survive on, zombielike, with Fed and Treasury "commissars" on the inside watching their every move, because no one can bear the thought of how many other institutions they would take down if they failed.

cpebbles wrote:I'm about ready to just go ahead with this and bear the depression now unless someone convinces me we're doing anything but buying time for the voting public to get some of their money out of the markets before they crash (While allowing the bailout recipients to take one last bite of the apple for playing along).

planet pujolsian wrote:Admittedly, I haven't been paying enough attention lately to know the "meat" of the Republicans objection to the latest stimulus efforts. Can anyone summarize? I assume they object to specific allocation recipients? Or do they object to the stimulus altogether? Anyone without trepidation about that much money earmarked in that short of time is probably indifferent, wealthy, or far left of center. However, it irks me that the same people with a good deal of responsibility for the unfettered, unregulated capitalism that got us here in the first place are trying to represent themselves as stewards of the economy. That ship has sailed.

planet pujolsian wrote:I assume they object to specific allocation recipients?

Arthur Dent wrote:

planet pujolsian wrote:I assume they object to specific allocation recipients?

Not really. They want the entire thing scrapped and replaced with a truly massive (and far more expensive) tax cut. As far as trepidation over spending, spending is the whole point of the stimulus. If you believe in stiumuls, you're going to have to be ok with spending a lot of money. In fact, the current package is almost certainly far too small (by maybe 2x). It's not really possible to favor stimulus but be concerned that there is too much spending.

Arthur Dent wrote:

planet pujolsian wrote:I assume they object to specific allocation recipients?

Not really. They want the entire thing scrapped and replaced with a truly massive (and far more expensive) tax cut. As far as trepidation over spending, spending is the whole point of the stimulus. If you believe in stiumuls, you're going to have to be ok with spending a lot of money. In fact, the current package is almost certainly far too small (by maybe 2x). It's not really possible to favor stimulus but be concerned that there is too much spending.