Obama and the Bankers

Politico offers a fascinating glimpse at some behind-the-scenes dialogue between POTUS and a group of bank CEOs that occurred at a March 27, 2009 meeting at the White House. The tone of the meeting was one way and it was set by the President:

"Arrayed around a long mahogany table in the White House state dining room last week, the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves. 'These are complicated companies,' one CEO said. Offered another: 'We’re competing for talent on an international market.' But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. 'Be careful how you make those statements, gentlemen. The public isn’t buying that.' 'My administration is the only thing between you and the pitchforks.' [emphasis added]."

Seriously, how tone deaf and clueless are these guys? It is a shame that these folks weren't forced to share the same fate as GM's CEO Rick Wagoner last week.

We Own You Now

I'm a little late to the party on this issue but I love Senator Claire McCaskill's proposal to limit CEO total compensation to $400,000, the same salary as the President of the United States. If her legislation passed, it would only apply to firms that have taken bailout money. On the Senate floor, the Missouri Democrat said: "Is that so unreasonable?....It’s eight times the median household income in the United States of America. … I don’t think that sounds like a bad deal.....They don’t get it...These people are idiots."

There has been some opposition to the proposal though. Former NYC Mayor and former presidential candidate Rudy Giuliani defended large bonuses: "If you somehow take that bonus out of the economy, it really will create unemployment....It means less spending in restaurants, less spending in department stores, so everything has an impact."

Yes, I can see how making a pauper's salary of only $400,00o would mean you could not eat out anymore. Gosh, all those CEOs and their families forced to eat ramen noodles every night. Sorry, this argument is just plain stupid and shows that Giuliani is just out of touch with the other 99% of Americans who make do on less than $400,000 a year.

Here's the deal. If you are a corporation that has taken taxpayer money, you need to play by the rules--written and unwritten. One big unwritten rule is that you DO NOT plan to take delivery of a $42 million corporate jet while taking $45 billion in taxpayer money like Citigroup had planned. You DO NOT accelerate $4 billion in bonuses to your rich executives and redecorate your office for $1.2 million while your company crumbles as Merrill Lynch's CEO did.

No wonder President Obama went off the other day in the Oval: "And when I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses -- the same amount of bonuses as they gave themselves in 2004 -- at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that if they don't provide help that the entire system could come down on top of our heads -- that is the height of irresponsibility. It is shameful."

I hope I continue to hear outrage coming from our political leaders on the issue of corporate greed. I'd like to hear it come from both sides of the aisle. This is not an ideological issue. This is an issue of common sense and what is right. If the American taxpayer is helping bail these companies out, they need to have strict rules in place concerning our money. No golden parachutes, no ridiculous bonuses, no sky-high salary, no new corporate jets. If you are not happy running a large company on the same salary the president makes then leave and don't let the door hit you in the rear on the way out. For every CEO walking out the door, there would be a dozen waiting to take his or her place.

And make no mistake, the motto from our government should be: We Own You Now. You hold your hand out for taxpayer money, you forfeit your right to commit sins of corporate largess. Not anymore. Not in this day. Not in this economy. We own you.