Sunday, February 08, 2009

Quote of the Day:

On Barry's executive compensation cap proposal:
Now as I recall, a lot of people ... think that people who support the Iraq War but have never served in the nation's armed forces are "chickenhawks". Since Obama has never held a job in the private sector and is now directing payroll decisions for the private sector, doesn't that make him a "bogusmogul" of some sort? -Men Are Not Potatoes

Of course the .gov thinks it's right and proper to tell you the minimum you can pay someone, so why not dictate the maximum, too? And if CEO's are limited to $500k/yr, how about CFO's? Regional marketing directors? What about customer service supervisors, server maintenance guys, and janitors? Heck, why don't they just gin up a table of the acceptable wages for every job title in the country?


alath said...

Last I saw, it wasn't a cap on executive salaries for every company - only those that are getting taxpayer bailout money.

If these corporate executives are going to go to Washington to get taxpayer money to run their businesses - on the justification that the businesses are providing necessary services to the public apart from the market success or failure of their products and services - then their "businesses" have essentially become government agencies. If they are government agencies, then I am perfectly fine with government rules capping their salaries.

If they are acting like a business - using private money and their own work, assuming risks themselves, and make a jillion dollars a year, then all the more power to them. It's their company, their money, their decision.

If, on the other hand, they are government bureaucrats, living off the taxpayer dole, assuming no personal risk for their success or failure - then $400K is way too much. If Obama actually goes through with this, which is essentially cutting the salaries of highly overpaid government employees, then it will be the first action of his I can actually applaud.

Billll said...

Softly, softly catchee monkey.

Having established precedent for setting salaries at the top and bottom levels, the next step will be to claim authority to set salaries at the intermediate levels for aby company doing business with the government.

Which, by the way, they already have in the defense contracting business where contractors are required to pay "prevailing wages" to all the workers, this being defined as union wages on the east and west coasts.
Thus the presence of an aerospace company of significant size drives up the wages in the area surrounding it to otherwise unrealistic levels.

theirritablearchitect said...

"Heck, why don't they just gin up a table of the acceptable wages for every job title in the country?"

Sounds like Sweden.


Certainly seems so

Anonymous said...

Corollaries to the laws of supply and demand:

If you want more of something, subsidize it, less of something, tax it.

See: productivity.

They tried this sh*t twenty years ago, with surtaxes on executive salaries. What happened? Massive increases in stock options and other manipulations.

The big boys get paid, one way or another. Who pays? Us, one way or another. Which way is better? The one where the .gov gets the least say/control/cut. Efficiency, you know.

WV: pathum - plural for pathos?

Anonymous said...

"Heck, why don't they just gin up a table of the acceptable wages for every job title in the country?"

They will.

Old NFO said...

Agreed, they will probably be setting "our" salaries in the near future- And wondering why no one wants to take these jobs...

Anonymous said...

Take "free" government money, then sooner or later they come back around and dictate terms. That's the standard mis^H^H^H that's the oldest trick in the book.

Tam, weren't you around for the double nickel speed limit? Know anything about public schools? Ever sign a contract with a private company that does business with the government and have to sign off on a form that says that you don't have separate bathrooms for people of different skin color?

WV; dogome Dog-o-me? do-go-me?

Tam said...

Just because they stuck up the convenience store down the street doesn't mean I'm just gonna shrug and sigh when they stick up this one. ;)

Les Jones said...

I'm with Alath. The compensation limit is for execs of companies getting bailed out. Don't want the limits? Don't ask for the money.

If you take the government cheese don't expect to eat brie.

alath said...

The execs asking for bailout money are essentially saying "We are not businesses. Our mission isn't about building stuff and selling it. Instead, our real function is to take government money and use it to provide jobs, healthcare, and retirement benefits."

In essence, they are claiming to be government agencies, and I'm just taking them at their word.

If BHO was actually setting salary limits for private enterprise - actual businesses - I would be livid.

But he's not. He's cutting the salaries of the heads of government entitlement agencies. And I'm all for it.

Brad K. said...


I don't feel comfortable with your idea for the gov't to create a list of job titles and salaries. I mean, they have Rhodes Scholars keeping intact the list of government civil service jobs, job descriptions, and pay grades and levels and stuff.

I recall the Navy had to change a couple of their frigates - I was stationed on one. One June 30, the USS South Carolina was no longer the DLGN-37 (light guided missile frigate, nuclear powered). The next day she was the CGN-37, a light guided missile cruiser, nuclear powered. It seems the Russians didn't have any guided missile frigates, and one of our treaties agreed to limit war ships. So we relabeled a frigate into a cruiser. I noticed they decommissioned the USS South Carolina, CGN-37, rather than refuel the reactors. It seems a shame. The next ship I served on was the USS Saratoga, CV-60 aircraft carrier, regularly overhauled (this was 1978) since about World War II.

So I could see the Government deciding that engineers should be lumped in with part time fast food servers for pay level. (Yes, I do believe there are several frustrated and vindictive people already working in the Government clerical type positions.) Obviously the inept but fanatic TSA types would be lumped with the CEO's, CFO's, and Senators. Oops - Senators would already be on salary lists, so they would be unaffected. Silly me.

I recall a time in the mid 1980s when Sioux Falls, South Dakota was experiencing a large influx of businesses and professionals. Many were coming from Minnesota, at the time second only to California in personal tax burden. When Minnesota tried to offer businesses tax incentives to locate/stay in MN, I understand they were told that their executives were fleeing the punitive tax levels - the only tax incentive that would help companies, was to ratchet down the personal tax burden.

I understand that North Dakota and South Dakota are still experiencing economic and job growth today. Funny how that works.

Perhaps the special interests whispering in Democratic ears are building companies in India, and having trouble recruiting top executives and engineers/fast food wait people.

Don M said...

So: Ford can now hire anyone they want away from GM or Crysler by paying more money. Watch for Ford to become the Yankees of the US car world, while GM and Chrysler become US counterparts to Leyland and Lucas electronics

Anonymous said...

The camel has its nose in the tent. Barney Frank (yech) has already started openly talking about capping executive pay for EVERY company, not only the ones that take a handout from Uncle Sugar.

Class warfare works. The dems (spit) go to the American people and decry the fact that corporate fat cats are making TOO MUCH MONEY! Many people, motivated by jealousy, are outraged. The dems (spit) then tell the outraged among us that PUNISHING those overpaid execs will be good for the rest of us. Now, they never explain exactly HOW punishing Peter helps Paul, but people buy it.

I'm curious if big corporations will stop donating to the democrats (spit) over this, or if they'll still pay the danegeld in the hopes that our new democrat (spit) masters don't do anything worse.

New Jovian Thunderbolt said...

Universal salary caps? What could go wrong?

perlhaqr said...

I would have to say that I don't object to executive salary caps any more than I object to corporate bailouts in the first place. On a scale that's normalized from zero to one, once you've pinned things at one, there's no higher level of "objection".

Fuck 'em all.

Matt G said...

As fun as it is to see the instructive lesson being demonstrated of what happens when you take Ceasar's coin, your point is disturbingly spot on. Think of the eventual ramifications. 'Way back in 1942, Wickard first said that the Fed could tell you whether or not you could grow wheat even for your own use, because it was a fungible item, subject to control by the Interstate Commerce clause. I've already ranted on how that got extrapolated into Raitch.

Between the occasional tax break given for businesses, and federally-secured college loans for company officers, I reckon that the fed could claim to have a finger in the pie of every business in the U.S., to justify its interference. Using the Raich standard, it probably doesn't even need that; it's got the Interstate Commerce Clause.

Somebody stop this train. I believe that I'd like to get off.

Anonymous said...

CFO is an executive and thus also bound by the pay limit.

GunGeek said...

Let's play the word-change game, shall we? Take this quote from Obie on the subject:

“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.”

Now let's change just one word:

“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 companies being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.”

Hmmmm. Why does such an enlightened one believe and promote the first statement while actively fighting against the second one?