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Thursday, February 05, 2009

Obama Slams Bailout Bankers

Finally, common sense has arrived in Washington D.C. and its just in a nick of time. While the rest of the nation is trudging through the economic crisis and hoping that their job and paycheck will not be pink slipped, Wall Street executives that accepted billions in bailout money have been passing out record bonuses. President Obama is putting the breaks on that practice and it makes perfect sense to do so. You don’t beg someone for gas money and continue to drive a car getting four miles to the gallon.

Over at the Worcester Telegram they have this to say about it from the Associated Press…

Thursday, February 5, 2009
Obama caps pay of bailed-out execs
Company limits won’t apply retroactively

WASHINGTON — President Barack Obama yesterday imposed a $500,000 cap on senior executive pay for the most distressed financial institutions receiving taxpayer bailout money and promised new steps to end a system of “executives being rewarded for failure.”

Obama announced the unusual government intervention into corporate America at the White House, with Treasury Secretary Timothy Geithner at his side. The president said the executive-pay limits are a first step, to be followed by the unveiling next week of a sweeping new framework for spending what remains of the $700 billion financial industry bailout that Congress created last year.

The pay limit comes amid a national outcry over huge bonuses to executives who head companies that seek taxpayer dollars to remain afloat. The demand for limits was reinforced by revelations that Wall Street firms paid more than $18 billion in bonuses in 2008 amid the economic downturn and the massive infusion of taxpayer dollars.
- Worcester Telegram

I believe it was the President of Ford Motor Company that stated he would accept no pay till his company is out of these troubled times. Have you seen even one of these Wall Street fat cat executives make that same pledge? Since they are reluctant to belly up to that particular bar, President Obama is doing the right thing by insisting on reduced pay for those banks willing to drink from the U.S. Treasury in the form of bailouts.

Nothing pisses off the regular folks more than seeing a company that just took several billion in taxpayers money to stay afloat and then see that the same company went on or is planning on an expensive junket. Same rule applies when you have a failed institution like Merrill Lynch, and the CEO demands a $10 million dollar bonus for his actions in the collapse of the company.

Kudo’s by the way to Wells Fargo for canceling its pay for performance junket to Las Vegas and making its first quarterly dividend payment ($371.5 million) on the money it borrowed from the Treasury.


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