Lawmakers are grilling bank CEOs today:
In his opening remarks, Henry Waxman, the Democratic Congressman who chairs the committee, said the purpose of Friday’s hearing is to determine whether lofty compensation is justified when companies fail to perform.
Nothing too important here. I just think it’s funny when politicians have the audacity to criticize others for being well paid and failing to perform.
Xenos
Every time I defend you, Michael, I end up regretting it.
I demand another apology from Krista.
J. Michael Neal
I see that Angelo Mozila is his natural shade of deep orange.
Jake
This has been another edition of: S.S.D.D.
AkaDad
I denounce and reject their audacity.
capelza
Michael, a quick google shows that Congresscritters make $169,300 a year (with some swet benefits I am sure…
How much comp do these mega CEO’s make…even when they are fired”? Millions and millions and millions. I’m too lazy to google relevant info, but the comp packages of the upper echelon has skyrocketed, particularily in light of the stagnant wages of their employees.
The comparison is weak. And as I need to remind, if the states, districts, etc don’t like the performance of their respective critter, they can vote the bum/bummette out.
Not everything Waxman does makes me happy in the pants, but he does work hard for all the American people…
J. Michael Neal
Chuck Prince: If I talk slow enough, and throw in enough jargon, maybe no one will realize that I’m avoiding the question.
Darrell Issa (R-CA): There was nothing illegal going on, so who cares?
Richard Parsons: We thought about exactly the question you asked, and we did decide that we should pay failing executives as much money as successful ones.
Angelo Mozilo: Hey, as long as prices were going up, everything was fine. It turns out that prices don’t always go up. Hucoodanode?
Patrick McHenry (R-NC): Companies don’t overpay for failure. They try to pay their executives as little as possible and get the most benefit. Yeah, right.
J. Michael Neal
Chuck Prince: We had risk models, but they didn’t actually try to measure risk. That was someone else’s problem.
Rep. Peter Welch (D-VT): Goldman pwned all of you clowns, so why are you paying yourselves like they pay themselves?
J. Michael Neal
Richard Parsons: Asking about our risk models is a good question, and it is worthy of a hearing before a different committe, so that I don’t have to answer questions today.
Rep. Chris Cannon (R-UT): Golly, it’s so swell that such fantastic people would grace us with their presence.
So far, Cannon wins the Please Let Me Suck Your Dick Award.
Zifnab
Ask yourself this. Has there been a major terrorist attack on US soil since the Democrats took office in 2006? Has a single American citizen lost his life to a scary brown person? If not, then the only thing we can assume is that the government is doing its one and only job.
Andrew
Times Square got asploded!
Zifnab
Thx to J. Michael for some excellent Live Snark Blogging.
Dennis - SGMM
I like the argument that Clown-CEOs must be offered huge compensation packages because otherwise some other company would get them.
“I had to pay $25,000,000 for this steaming mound of dog shit because otherwise some other company would get it.”
Thepanzer
Maybe the problem is that the legislative and executive branches hasn’t failed enough. If I could wave my MUP magic wand and have everything done by both groups mulliganed from the last 7 years we’d probably be a lot better off. Too bad George, the house, and senate didn’t all just go the ranch and clear brush since 2001. Imagine what the US would be like if Dick Cheney had taken a nap and played some golf from 01 to 08.
Maybe if we offer to give them pay raises to stop fucking up they’ll just sit on their ass prior to us falling behind Zimbabwe as an economic power.
Fred X. Quimby
I asked my wife, the bad plastic surgery expert, if Angelo Mozila had collagen injections in his lips. She took one look at him and said “ewwwwww”. She tell me she’s not sure if he does or not because she can’t bear to look any closer.
J. Michael Neal
Eleanor Holmes Norton (D-DC): If I didn’t have a stutter, I’d be making you look like a corrupt moron.
Harley Snyder: We chose to listen to the consultant Angelo hired rather than the one we hired, when it came to negotiating his compensation.
Buck
Ditch diggers work their arses off putting food on the table, and they aren’t able to afford insurance coverage for their familes. So please, don’t put Waxman in that group either!
Michael’s point is valid. For all their money, benefits and perks, do you see the will of the people being put forth by the clowns in Washington?
Michael D.
OT – not that there was a real topic. Fark headline of the day:
“Obama foreign policy advisor calls Hillary Clinton a “monster”. Later apologizes to Godzilla, Rodan and Count Orlok for making the comparison”
Buck
Ditch diggers work their arses off putting food on the table, and they aren’t able to afford insurance coverage for their familes. So please, don’t put Waxman in that group either!
Michael’s point is valid. For all their money, benefits and perks, do you see the will of the people being put forth by the clowns in Washington?
The Other Steve
As a child he worked for Willy Wonka.
Buck
Ditch diggers work their arses off putting food on the table, and they aren’t able to afford insurance coverage for their familes. So please, don’t put Waxman in that group either!
Michael’s point is valid. For all their money, benefits and perks, do you see the will of the people being put forth by the clowns in Washington?
J. Michael Neal
Rep. Waxman: Hey, Finnegan, did you use the same buffoon of a consultant Countrywide did? Is that a yes?
Issa: I’m going to keep talking and talking about how it is perfectly fair to pay executives who fail like Goldman does executives who succeed.
Buck
Sorry about that multi-posting. Wasn’t planned.
Dennis - SGMM
Hey, those bank CEOs have to be there. How else to pay back Congress for the Bankruptcy Reform Act?
J. Michael Neal
Rep. Elijah Cummings (D-MD): Let’s talk about Conutrywide’s customers so that we can put a human face on this. I’ve spent the last hour and a half looking at your orange mug, and it very clearly is not a human face.
Pooh
Michael,
This is not a good post.
The Grand Panjandrum
Easily QOTD. Congrats Dennis. I’m going to steal that one.
Michael D.
Tangelo Bronzilla???
J. Michael Neal
Rep Edolphus Towns (D-NY): Parsons, why would a brother sell out to the finance companies?
Parsons: Why, yes, we do scratch each others backs.
Walker
Compensation, smompensation. The real issue is Mozilla manipulating Countrywide stock prices with share buybacks so that he could sell his options and get his money out at the shareholders expense. But then the SEC just doesn’t give a damn anymore.
Michael D.
Pooh: Thanks for taking the time to read the post, click the comments link, type a comment, and click Submit to tell me that.
pharniel
The Tan Man endures!
the heavily rpublican ‘i won’t vote for nothn’ with a D next ot it” thos morning wants to start seeing these guys heads in nooses.
when you start loosing the big L Libritarian contingent I think you’re in for a world of hurt.
Even my father, who’s become a dark spamming avatar of fox news is starting to say things like ‘well, maybe they were a bit over paid, and maybe the government would be right in doing something about it.’
nearly had a heart attack.
Dennis - SGMM
It’s yours. Use it with extreme prejudice.
J. Michael Neal
Rep. Paul Kanjorski (D-PA): I don’t want you guys to think that I’m beating up on you while I drop this sledgehammer on your hands.
Keith
As big a disaster as the subprime mess is, it disturbs me how often Congress calls up executives to testify because they got paid a lot of money. Isn’t that what shareholder lawsuits are for? I just fail to see how salaries and bonuses are something Congress should be trying to regulate.
J. Michael Neal
Mozilo: We want people to take risks, unless those risks threaten me.
J. Michael Neal
Prince: The damage was all done on my watch. Don’t examine my previous statements.
Mozilo: Future? What’s the future?
Zifnab
*Gasp* Republicans voting alone in lockstep in support of big business bail-outs with no accountability attached? I am shocked, good sir. Shocked and dismayed. Clearly the Democrats still haven’t learned the value of bipartisanship. I’ll be writing in Mr Bloomeburg this November, and I hope all of you will join me.
Jake
The Snark is strong in this one.
J. Michael Neal
Parsons: Chuck told you not to examine his previous statements.
Pooh
Mike, the thing is, I put about as much thought into my reply as you did into your original bit of knownothingness. There’s a point to be made here to be sure, how about spending a little more effort and actually making it, since you are a front pager and all?
J. Michael Neal
Unfortunately, Norton let herself get dragged into a morass of a discussion on what the definition of “compensation” is.
Zifnab
Well, that’s the joke isn’t it? With the advent of E-Trade, guys like Merrill Lynch selling to the “average joe”, and 401(k) plans that the average investor doesn’t watch like a hawk, a great many shareholders don’t even know they can sue. The brokers don’t give a crap if the stock they sell you tanks, so long as they aren’t holding too much of it when it does.
And, if you look at cases like Enron, fighting to pry the money back out of the hands of the bastards who just raped you for 5% of your paycheck over the last ten years just leaves you up against the same old Republican laws and justices that the big business guys put in place.
The system, she is just a tad rigged.
I’ve got no problem with Waxman trying to step in and nip these sorts of shenanigans in the bud from the very beginning. I just don’t know what he plans on doing beyond repeatedly exposing these guys to the light of day. Of course, everything that comes out in the Congressional Record can then be used in future court cases… but you still have the problem of collecting after a decade of lawsuits.
J. Michael Neal
Mozilo: Being offered a few million dollars in compensation is showing me a lack of respect.
J. Michael Neal
Mozilo: I’d rather that my employees run the investigation than your employees do, Mr. Cummings.
Ellison, Ellensburg, Ellers, and Lambchop
It’s standard election-year class-warfare showboating. Look at My Congressman, fighting The Man on TV! Congress won’t actually do anything, so it’s harmless fun. My only question is: Can we get Isiah Thomas and Stephon Marbury up there, too?
MNPundit
Uh, wake up Michael D.
Politicians are not rich, it’s the rich who are politicians. There are many out there even members of congress that are not particularly wealthy.
J. Michael Neal
Mozilo: Geez, that memo looks bad. In retrospect, I really wish I hadn’t written it.
Cannon: Mortgage servicers will save the country. I also don’t understand correlations.
J. Michael Neal
Mozilo: I’m just like Jimmy Stewart. With orange skin.
Mozilo: It would be stupid of us to make loans that couldn’t be repaid. Please ignore all of the earlier comments about securitization.
Krista
I’ll apologize for everything Canadian except for Celine Dion. America deserves her, after polluting our airwaves with such gems as “Temptation Island”, “The Simple Life”, and the current nadir of American culture, “To Tell the Truth”.
And to think you guys were so worked up about “Little Mosque on the Prairie.”
Zifnab
Or Harriet Meirs and Joshua Bolton?
Oh, wait. Executive Privilege? Man, I bet Clinton really wishes he could have pull shit like that.
Grand Moff Texan
Can’t have been liberals. Liberals know there are no conservatives at recruiters’ offices.
.
J. Michael Neal
Issa: All of us make sure that we’re reimbursed for our spouses’ travel.
Grand Moff Texan
Good point.
So let’s settle this right now. Pick a limit, then tax everything earned over that limit at 100%.
Same for athletes. It’s stupid to make millionaires out of people who play a child’s game with a ball.
.
jrg
Sounds like a dog and pony show to me.
If politicians really wanted to do something about this, they would apply pressure using state pension funds and civil lawsuits, like Spitzer did.
Grilling wall street execs in front of congressmen is like scratching a dog behind the ears while baby-babbling “That’s a bad little puppy! Who’s a bad little puppy?”.
As an ex-Worldcom employee, I have zero sympathy for these crooks. Using public pension funds to control this sort of thing is exactly what individuals would do if individuals had the time and ability to read every annual report, and vote in every shareholder election.
Unfortunately, individual investors have close to no clout when it comes to overcompensation for under performing executives.
J. Michael Neal
Waxman: When you fired O’Neill, why didn’t you save the company $125 million by actually firing him?
Finnegan: It isn’t just O’Neill that can’t be fired for incompetence, it’s all 10,000 of our executives that we can’t fire for incompetence.
Zifnab
I don’t think I’ll ever go along with that idea. Firstly, athletes are entertainers, and if you don’t have a problem seeing Harrison Ford paid a few million for a movie, I don’t see why Brett Farve or Tony Romo magically become less valuable.
Secondly, if I can sell you widgets for $5 a pop and turn a 10% profit, why should you limit the number of widgets I can continue to turn a profit off of? High taxes are one thing – we had a 90% tax in the 50s and still regularly refer to that as our country’s “Golden Age”. 100% taxes are entirely different, tyrannical even, as they basically cap what a human is allowed to possess. Why do you get to tell me how much money I am allowed to make?
We need regulation to keep people safe, we need salary floors – like the minimum wage – to ensure everyone is treated with a modicum of fairness, and we need skillful and competent bureaucrats who know how to balance between in-house government work and contracted assistance. We don’t need mandates and arbitrary rules unless they directly affect running a good government.
You’re never going to uncorrupt America by taking away a CEO’s paycheck. They play the good’ole’boy’s club in the boonies of West Virginia the same as they do in the penthouses of New York and LA. If you want to fix the failing economy, you need real capitalism – consumer choice, freedom to enter the market place, and rewards that match the success of the business. The free market DOES work when you make it work for you.
Jake
Nice try. Next you’ll tell us Al Quaida in Iraq proves that Hussein had close ties with bin Laden.
Canuckistan unleashed The Northern Shriekstress upon the U.S. before any of that stuff. In fact, how do we know that She Who Makes Us Want to Stick Forks Deep into Our Ears isn’t the direct cause of such atrocities as The Simple Life?
We don’t, do we?
liberal
Michael D. wrote,
But politicians, at least at the Federal level, are very poorly paid, relative to their responsibilities.
Congressional salaries should be jacked up quite a bit, with concomitant draconian legislation passed against taking money or any kinds of benefits from interest groups (like the old “hire my spouse” nonsense).
The way the system is set up now, there are big incentives to run for Congress if you like being compensated by interest groups or if you have high personal wealth and want power.
liberal
Grand Moff Texan wrote,
Why tax people based on their earnings?
Much better to tax land value. Earnings are a measure, however imperfect, of what someone contributes to the economy. Land value is a measure of how much society contributes to the landowner.
Not to mention other economic rents, like rents from so-called “intellectual property,” other “land” like mineral wealth and EM spectrum, etc.
liberal
Zifnab wrote,
The key here is to distinguish between what one posesses as the product of the fruit of own’s labor, and what one possesses by virtue of a government-granted title to a resource that no human created.
Stoic
Waxman is probably one of the few who actually is worth his salary and comps. Hell, I’d give him a raise.
The Rebel
oh Henry the Pitiful… looks like what we really need is a committee chair with big, hairy ones, huh? 1% command 90% of all stock traded in Out-of-Hand-Gringoland, thanks to outrageous legislation mandating that an un-accountable corporation be treated as an American human being with the sole purpose of generating profit for it’s owner
Liberal Masochist
http://money.cnn.com/2008/03/07/news/economy/bush_econ/index.htm?cnn=yes
This just in! Breaking news from the White House.
RSA
I wonder what metric you’re using? I’d have thought that for a small government libertarian, not doing very much would be in the desired job qualifications for any politician. (You could argue that they could do as much for less money, but that’s a separate question–what do you want them to do?)
Jen
from RSA’s link —
This man is delusional. You find me somebody who’s going to use their $600 to create a job.
I’ve calculated my family should get $1800. It will take every penny of that to keep my son in camps and child care while he’s out of school for 10+ weeks this summer. So that’s what I’m doing with mine. I expect a lot of other folks will do something similar, maybe credit cards, maybe medical bills. But if this is a “long-term solution” then I’m TZ.
Jen
BTW, does anyone know if the stimulus money will be considered taxable income for purposes of our 2008 taxes?
HyperIon
Michael D. make a funny and got a gig at Balloon Juice.
His performance reviews since have been less than stellar.
J. Michael Neal has made many funnies here. Maybe he should get a shot.
Xenos
You are joking, right? I thought they were advance tax rebates for fiscal year 2008. It will be deducted from your 2008 tax return.
Zifnab
I’m just confused as to why they aren’t tacking on the money as an income tax credit. I think this is considered tax money they’re giving back, so I doubt it.
chiggins
I know sysadmins in NYC who do better than $169,300. Of course, they keep their machines stable, secure, and maintainable, and are responsible for keeping them that way (even at… THREE A.M.! Boo!), so maybe that’s an unfair comparison.
Beeperberries for congress critters then?
*ring*
“mrmph. this is Fein… *yawn* Feingold…”
“Dude. Your FISA legislation is down. POTUS and Vader are still doing warrantless data mining.”
“Aw man, it’s 3 a.m.! This can’t wait ’til morning?”
“Your shit is broke. Fix it.”
Jen
Oh, fine, I’ll just do my own research. It’s a 2008 “tax cut”, and not taxable income. This explains the basics…
Dennis - SGMM
Yeah, that really helped with the 63,000 jobs lost in February, the January jobs lost number raised by 22,000 and the fact that the estimated 82,000 jobs added in December was revised down to 41,000.
I’m other people: We’re in a recession.
RSA
J. Michael Neal owns this thread.
demimondian
But does he have orange skin?
J. Michael Neal
Thanks. Tangelo’s presence tends to bring out the sarcastic in me. I don’t think I could handle the pressure, though.
J. Michael Neal
On a related note, thanks to Tanta over at Calculated Risk, we have links to the opinion (Part One, Part Two) of Jeff Bohm, a Bankruptcy Judge in the Southern District of Texas, on a matter concerning a mortgage in bankruptcy. The behavior of the plaintiffs was so bewildering that he kept digging long after the defendant stopped participating in the case. While his opinion isn’t as funny as Christopher Boyko’s was, it is a first class ass reaming.
He takes on not only the plaintiffs in front of him, which features the Tan Man’s company itself, but the entire system of cutting corners in the legal process in order to save a buck. I like the last sentence; it basically says that, until Countrywide has convinced him that it’s reformed its practices, he’s going to make a couple of its employees fly to Houston every time that they have their attorneys file a motion in his court.
demimondian
Hmm. The farce is strong in this one.
The Other Steve
Whose the stupid one? The guy getting paid $5 million to toss a ball around, or the idiot who just paid $100 to watch him?
tBone
Damn it, I love tangelos, and now I’m going to laugh every time I see one.
r€nato
Waxman is one of the few congresscritters who has the moral standing to criticize whomever he pleases. He is squeaky clean and a real crusader for the people. IIRC, it was he who persisted for years against the tobacco lobby and I think it was one of his hearings where the tobacco CEOs made their infamous oaths that they did not believe tobacco kills people.
Grand Moff Texan
Actually, I do. So do the studios, which is why Cloverfield was made with a bunch of nobodies.
And I don’t think it’s a question of their actual value, but that’s just me. Players in the NFL didn’t become more valuable, they went on strike and demanded a bigger share of the revenue streams that already existed.
Let’s not pretend that these values have been assigned by a “market.” People make these decisions. People are responsible for the consequences.
.
Jake
Heh.
Martin
And that market is inflated by artificial constraints to the size and exclusivity of the marketplace. Without team expansion, there is an artificially constrained supply and a growing demand. And by legislative fiat, these leagues are given legal monopoly status so no competition is permitted.
Jamey
I enjoy this site so much more now that I’ve got the Firefox Michael D. post filter, 1.1.
Zifnab
Lulz, PotD!
The people are the market. Saying “you can’t make more than $X million a year” is like saying “I forbid you to sell more than Y number of widgets because I don’t want you having more money than me.”
When the price of a football ticket gets too high, people stop going to football games. This isn’t like gasoline or brussel sprouts. Entertainment is an infinitely elastic good. There is nothing you can do or say or act out that I am required to go see. So when you bitch about sports salaries, you really are just bitching about unions. Being a Democrat, I would think you’d appreciate how sports unions have had such a strong hand in their own industry. Athletes shouldn’t be a target of scorn, they should be a god-damn blueprint. If you don’t like how much they get paid, go watch people play in the farm leagues or sit around and watch some college co-eds go at it. But don’t come crying to me because Roger Clemens pulled down eight figures. If he wasn’t worth that much, I guarantee you the Yankees wouldn’t be paying it.
Chuck Butcher
Michael D,
Having actually run for Congress it was important to know what might happen if I actually won. I’m a small time contractor making not much, really. Keeping my home in NE OR and living in DC alone made it a near wash, the better health insurance and a pension plan were exactly the only upsides. Throw in travel from DC to NE OR to keep contact with the CD and it quickly became an economic losing proposition and I’m talking about living in down scale DC housing, lesser than my very blue collar NE OR house. (which is quite nice only because I am a construction contractor)
There is wealth in Congress, but it didn’t come from there. That piece regarding their over compensation was exactly uninformed, now their performance is something else.
Martin
Isn’t that just a twisted form of supply-side thinking? The fact of the matter is that there *is* that kind of demand for the entertainment. If there are people willing to drop that kind of money, why can’t I raise money, build a stadium, hire a bunch of players below market rates (there is no shortage of people wanting to play a game for money) and compete?
The reason is that all of the sports leagues are legal monopolies. If we had broader competition, ticket prices would stay in check, entertainment would be brought to a larger population as either stadiums expand or the league expands, and most likely more income would be generated overall. So forbidding that Y number of widgets be sold is exactly what is happening since it is impossible for more than 16 NFL games to be offered per week and more than 1.6 million people attend – no matter what the demand is. Supply is pinned and a growing demand forces prices to go up.
So having unbounded supply would destroy the ability of owners to ask citizens to pay for their stadiums and would necessitate that player salaries be competitive in an elastic market.
Martin
I agree with Chuck. The only way that politicians come out ahead is to use their position as politicians to earn other income – writing a book, retire/lecture circuit, retire/lobbyist, etc. or to have earned it on the way in (Bush).
slippy hussein toad
Look, if these were salaries and bonuses of the rank and file workers your sentiment would have some merit. But these guys have the keys to the till. If you haven’t noticed, salaries for EVERYONE ELSE in the country have stayed flat while corporate profits have gone through the roof, and these blood ticks are slurping at the excess.
NO ONE is controlling them. And they’re ass-raping this country’s economy. It’s out the fuck of control.
AnneLaurie
Seriously, Michael D, this is a prime example of why normal people so often want to smack Glibertarians across the earholes.
Congresspersons: Making ca. $170k+bens for doing the jobs Michael D thinks shouldn’t exist — keeping the strong, rich, and criminal from pillaging the weak, poor, and honest.
Mozila & Co: Making $10m-$60m + (much more generous) bennies for manipulating share prices, cheating stockholders, encouraging or demanding their employees break the law, stealing from hundreds of thousands of people, running the companies that compensated them so richly into the ground…
Are these activities supposed to represent “libertarian values“? Because, you know, they’re not the kind of ethics that people who aren’t sociopaths are liable to publicly embrace.
fed up
Why is Michael D permitted to post here? This is ridiculous.
jake
Yes. SA2SQ, Vol. XXI
TenguPhule
You forgot the other half:
“Sure this dog shit has caked up and dribbled all over the floor, but we’ve convinced it to go away for another $12,000,000 and benefits. Raises for the Board across the Board!”
Chuck Butcher
whether we’re getting our money’s worth out of Congress is an open question, but I’m also pretty sure there are some of them you’d pay even more to do nothing, like say John Boehner.
Michael D got 90+ comments, something to be said for that.
Nancy Irving
Waxman is probably the hardest-working member of congress. Your comment couldn’t be less apropos.
Ellison, Ellensburg, Ellers, and Lambchop
Heh.