Wall Street certainly bears the blame for a significant portion of today’s economic meltdown, but seriously, they aren’t the real problem. Regardless, this has brought about the wrath of anti-capitalists, socialists, and wealth-envy sufferers. Here we have Eugene Robinson clamoring over Sen. Claire McCaskill’s (D-MO) rant about overblown executive compensation:
McCaskill introduced a bill to limit compensation at any company receiving bailout money to $400,000 — the salary of the president of the United States. It’s hard to improve on her words: “We should have done it in the first place. But I don’t think any of us thought these guys were this stupid. I don’t think any of us believed that they would take billions of dollars in bonuses while their institutions were literally days from being wiped out. But they did. And we’ve learned our lesson.”
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Things have changed. No longer does it seem reasonable — if it ever did — that the average CEO makes 344 times as much as the average worker, as estimated last August by the Institute for Policy Studies and the nonprofit group United for a Fair Economy. No longer does it seem acceptable that John Thain, the since-ousted Merrill Lynch chief who ordered those accelerated bonuses that so irked McCaskill, would spend $1.2 million of his fast-sinking firm’s money to redecorate his office — and then, with Merrill’s losses being revealed as even greater than feared, request a bonus of up to $10 million for himself.No longer does it make any sense to reward those who work in the financial industry so lavishly compared to the way we compensate those who, say, build tractors or write software or teach our children. Salaries should be reasonable and bonuses — much more modest ones — should be reserved for those who actually, you know, make money. If some of Wall Street’s vaunted “talent” balks and flees, terrific. It was “talent” that got us here.
What are these people smoking? So there are several big financial institutions on the brink of failing because of poor management, and the management has changed after receiving bailout funds from the government, and now Sen. McCaskill wants to cap their yearly salary to $400,000? What sane executive would want the job?! Isn’t it more important to offer competitive compensation to attract good executives to revive the companies? By introducing such a bill, it seems Sen. McCaskill, with the support of columnists like Robinson, want Wall Street to utterly fail. Maybe they prefer a government-run Wall Street.
Big shot executives like John Thain now have a big stain on their resume. That’s part of how capitalism works. The market will decide how much somebody like Thain is worth. Don’t bring the government into it.
