The Millionaire Good-Ol'-Boys Club, and … Obama breaks another promise

President Obama wants to cap executive salaries at banks and financial institutions receiving federal bailout money at $500,000 per year per employee. Since these firms are now running more or less on the government’s dime, the President feels that We The People should demand “accountability.”

Critics of President Obama’s plan argue that capping those salaries at such an unrealistically low level will drive talented people out of the banking industry and into other sectors with non-regulated compensation. That may be true; on the other hand, the banking and mortgage industries would probably be better off without a new generation of Angelo Mozilos, John Thains, and Kerry Killingers at the helm. If this is a guaranteed way to get rid of them, then maybe it’s not such a bad idea after all.

Yet my gut instinct tells me that Obama’s plan is nothing more than a smoke-and-mirrors parlor trick simply designed to temporarily calm the perpetual populist outrage over the disproportionally huge amounts of money that some people earn. Obama wants Americans to think that the government is “doing something,” but ultimately his plan will return unto him void. Banks and investment houses employ people who are far more clever than government bureaucrats, and faster than you can say “golden parachute” they will figure out clever new forms of compensation that will render such a guideline utterly meaningless.

ADDED: Bloomberg says,

The rules, created in response to growing public anger about the record bonuses the financial industry doled out last year, will apply only to top executives at companies that need “exceptional” assistance in the future. The limits aren’t retroactive, meaning firms that have already taken government money won’t be subject to the restrictions unless they have to come back for more.

Smoke. And. Mirrors.

Yet there is still “brain drain” fear in New York City, which is also currently reeling from the loss of millions in tax revenues that it has been collecting from the generous salaries and bonuses of Wall Street executives.

Ironically, at the same time that President Obama talked about limiting executive salaries, it was revealed that Tom Daschle, the former Senate Majority Leader and now disgraced former nominee for Secretary of the Department of Health and Human Services, had earned in excess of $5 million in consulting and speaking fees since leaving the Senate in 2004. And today we learned that Leon Panetta, tapped by President Obama to head the CIA, earned over $700,000 in consulting and speaking fees during 2008, $84,000 of which was paid by Merrill Lynch and Wachovia Bank.

In light of these revelations, I’d like to add an amendment to President Obama’s limits on executive salaries: Any former government employee or elected public servant earning more than $500,000 a year in consulting and speaking fees is permanently disqualified from ever again holding an appointed office in the United States federal government. I’ll allow for the possibility of someone becoming an elected office holder again if they have worked in the private sector. We could call it the “Dick Cheney Clause.”

The rules about this should be pretty simple — if you’ve “sold out” to private interests, then you have no business going back to work for the government as an appointed official. The potential for abuse by powerful government figures with deep ties in the private sector is simply too great. And this is the “era of responsibility,” isn’t it?


It seems that President Obama has reneged on yet another campaign promise: “As president, Obama will not sign any non-emergency bill without giving the American public an opportunity to review and comment on the White House website for five days.”

The Politico is reporting:

Obama scheduled a bill signing for 4:35 p.m. Wednesday, even though the House has yet to vote on the legislation expanding a children’s health insurance program. The legislation is expected to win final approval only hours before the president will make it law. (The SCHIP expansion passed the House today and was signed by the President – ed.)


Obama signed the Lily Ledbetter Fair Pay Act only two days after it received final passage last week, and it wasn’t posted on the White House website until after it became law.

But don’t worry. The White House pinkie-swears that they “will be implementing this policy in full soon.”

Maybe … but certainly not soon enough, and probably not before the President has a chance to sign some version of his dreadful “Porkulus” Bill into law. After so much damage has already been done, will it really matter?

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