(via Salon.com) President Barack Obama announced Wednesday that in the future firms that take federal aid to stay in business will need to cap executive salaries at $500,000. Of course, this has CEO's across the country and especially on Wall Street crying foul as if Obama has tread upon their right to our tax dollars. Never mind asking them what the hell they did to deserve one red cent after putting their companies in positions where they need taxpayer bailouts to survive.
"This is America," Obama said. "We don't disparage wealth. We don't begrudge anybody for achieving success. And we believe that success should be rewarded. But what gets people upset -- and rightfully so -- are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers."
"We all need to take responsibility," Obama said. "And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses. As I said last week, that's the height of irresponsibility. That's shameful. And that's exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis: a culture of narrow self-interest and short-term gain at the expense of everything else."
I read an interesting argument the other day suggesting that one of the reasons for the current coup de capitalism is extravagant CEO pay. The argument was basically that CEO's make so much money now in just a few years, that they have no real incentive to effectively lead their companies, thus the threats of business failure that drive innovation and competition no longer apply. To that end, if an executive makes $75 million over 5 years, why would s/he care if the company goes down the tubes? They would already have more money than they'll ever really need. Consider that Citigroup recently paid over $4 billion (that's billion with a B) in BONUSES to reward its inept management whose shoddy stewardship of the company cost it $19 billion in losses. If I screwed up like that I'd be out of a job in a heartbeat.