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When Did John McCain Become More Liberal Than Barney Frank on Executive Compensation?
September 24, 2008 11:51 AM
Re-assigned temporarily from the Obama campaign to Capitol Hill this week to cover the debate over the Wall Street bailout bill (HERE'S our "Good Morning America" look at the negotiations, so far), I have been struck by the debate over whether or not there should be any limits on executive compensation for those who work for firms receiving U.S. government aid.
The position of Sen. John McCain, R-Ariz., in his own words: "The senior executives of any firm that is bailed out by Treasury should not be making more than the highest paid government official."
I double-checked with the McCain-Palin campaign that McCain was referring to (a) federal government employees (as opposed to the well-compensated football coaches at state universities) and (b) salaries, not contract employees, such as the men and women from Blackwater.
I was told, yes, McCain was referring to the president, who makes $400,000 a year.
But this is not the position taken by the senior Democrats negotiating with the Bush administration on this bill.
Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, and Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, are pushing for three provisions for firms that receive government aid:
1) no golden parachutes;
2) a "claw back" provision so that any bonuses awarded based on fraudulent or incorrect earnings reports are returned; and
3) no rewards for excessively risky business behavior.
This means executives of these firms can continue to receive huge salaries and immense bonuses.
Why? Why are liberals like Frank behind only these modest steps that allow Wall Street execs to continue to draw huge salaries?
Four basic reasons:
1) Democrats on these committees say they recognize that, even if they were to enact salary and bonus limits, a shell game would result and executives would find ways to pay themselves a lot of money, regardless;
2) Democrats on these committees say that these executives have hard jobs;
3) Democrats on these committees say this problem isn't going to be solved by chasing experts out of the industry; and
4) there is no way the Bush administration would sign off on the kinds of compensation limits McCain is talking about. Even these modest steps are meeting with great resistance by Treasury Secretary Henry Paulson.
Does McCain not share these views of Barney Frank and the like?
The National Review's David Frum calls this "cheap demagoguery" by McCain.
To the contrary, it might be smart presidential politics. Obama's only articulated position on executive compensation is that there should be no golden parachutes; McCain wants to be seen as standing up for "the little guy," and his position has a certain emotional appeal.
And on that level, in the gut, many people personally might have no problem with the government confiscating these Wall Street executives' Lear jets and Hamptons mansions and selling them off, proceeds to go to the Treasury.
But in the real world, the McCain executive compensation position is a political non-starter and, therefore, an unserious proposal.
"I don't know who the conservatives are and who the liberals are," Rep. Ron Paul, R-Texas, just said during a congressional hearing.
I hear ya, Congressman Paul.
- jpt
September 24, 2008 | Permalink | Share | User Comments (44)
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You forgot a number....
#5. Barney Frank and Chris Dodd are up to their necks in government sponsored corporations payola.
Posted by: Captain America | Sep 24, 2008 1:44:36 PM
Beckie... if, by make mincemeat, you mean recite memorized bits of GOP dogma... you are probably right.
She's like Michelle Bachman or Jean Schmidt. She recites lines from the little red book, and all the GOP dead-enders nod in unison.
Posted by: Blip | Sep 24, 2008 1:33:38 PM
"If we own the companies then we have every right to set a salary limit. If they are privately owned, then more power to them."
Mack, I thought you were a capitalist. Do we have salary limits today for US goverment employees or their contractors? No, we don't. Show me where in the US Code we as taxpayers can dictate salary limits for public or private employees.
Also, we taxpayers will not own any stake at all in the companies. We will assume all the bad investments made by the companies. A new Resolution Trust Corporation will be formed with one single revenue stream, the American taxpayer. AIG, Fannie and Freddie get to unload their dog poop on us but they will remain as they are in structure.
Do you expect to get a monthly shareholder statement from the US Treasury telling you how your shares of AIG, Fannie and Freddie are doing? You won't own any shares of those companies. You're simply backing up the RTC.
Posted by: Woody | Sep 24, 2008 1:29:48 PM
Don't pity Palin, David! She is just biden her time! She will make mince meat of the old-timer!
Posted by: Beckie | Sep 24, 2008 1:22:20 PM
"He insulted women by choosing a ditz as running mate."
The Governor of Alaska is a ditz? Which state are you the Governor of, genius?
Posted by: Mack | Sep 24, 2008 1:06:28 PM
"Taxpayers have absolutely no right to determine salaries. "
If we own the companies then we have every right to set a salary limit. If they are privately owned, then more power to them.
Posted by: Mack | Sep 24, 2008 1:04:51 PM
I, too am watching Biden and i think its over for mc cain. He insulted women by choosing a ditz as running mate. He comes across as out of touch and senile . time to clean house
Posted by: mattyB | Sep 24, 2008 1:04:23 PM
Is McCain proposing a "New Deal" style
salary system or a pro-sports salary cap? Where's that in our platform?
Posted by: Bill D. Fence | Sep 24, 2008 12:59:04 PM
"Woody, you should remember that taxpayers are bailing these failed companies out.
I think that taxpayers have every right to set limits on salaries.
It's like a welfare to work program for bajillionaires."
You're entitled to your opinion but salary limits are a Marxist concept. If you don't like the fact that taxpayers are bailing out these companies, then you have options. Complain to your Senator and Congressman. Vote the bums out. Start a recall petition. Personally I'm against the bailout. I say let the companies fail.
If these particular executives are found to be involved in criminal activity, then we should absolutely seize their assest a la Ken Lay and reclaim as much as we can. To use these cases as a means to set wage controls on select individuals going forward is obscene.
Taxpayers have absolutely no right to determine salaries. Do I have a right to determine where my tax dollars go? No. We live under a constitutional Republic. We elect representatives to do our bidding and trust they will do the right thing with our tax money, create just laws, etc. Just because I pay taxes doesn't mean I have the right to determine which ships the Navy should buy, what cheese we're going to give away or where Congress buys their pens. It doesn't work that way.
Posted by: Woody | Sep 24, 2008 12:57:47 PM
Blip, when you say "welfare to work" are you proposing that the next time a failed mortgage giant like Freddie Mac pays McCain's campaign manager $15,000 a month he will be expected to do something for it?
Posted by: ricky | Sep 24, 2008 12:54:32 PM
McCain's message is all over the map. He's flopping around like a fish in a boat and all Obama has to do is be quiet and find a way to shut Biden up and this thing is over.
So what do we have to look forward to? A dismal economy, strained military, Middle East problems, sky high gas and heating oil prices, and a President who believes America is inherently a bad country that needs to heal its soul. Oh, and a Democratic Congress eager to show the new President who the real boss is.
Jimmy Carter part deux, here we come!
All we need are some high inflation numbers and double digit mortgage rates. Don't worry, they're coming soon. Time to buy gold and ride out the storm for four years.
Posted by: Woody | Sep 24, 2008 12:46:18 PM
Woody, you should remember that taxpayers are bailing these failed companies out.
I think that taxpayers have every right to set limits on salaries.
It's like a welfare to work program for bajillionaires.
Posted by: Blip | Sep 24, 2008 12:39:32 PM
Executives should get paid what the market will support in a free market society. If we're abandoning the free market system let's be out in the open about it. Setting limits on pay is certainly not regulation, it's flat out control of the market place. Here we go down the slippery slope!
Posted by: Woody | Sep 24, 2008 12:36:59 PM
He's just pandering.
He's falling behind so he is trying to campaign as an economic populist. What else is there to know.
Five months ago, he was embracing torture for Republicans.
Four months ago he was sucking up to anti-Catholic extremists.
Three months ago he was promising to cut taxes and de-regulate Wall Street.
Two months ago he was calling Obama an inexperienced celebrity.
One month ago, he was calling himself a "change" agent and declaring Obama an insider.
Three weeks ago he was asking for an end to negative campaigning.
Two weeks ago he released a barrage of lies against Obama.
One week ago he wanted to deregulate the Health Care industry to make it more like financial markets.
Today he is going to hang the CEOs from the highest tree.
This is what desperation looks like.
Expect his campaign to get really, really ugly in October. He's got his back to the wall. He's already abandoned his principles and embraced lying. He's got no place else to go so he is going to bet it all on the hope that desperate attacks will give him a chance in November.
Just make sure you are ready for it. And take it with a grain of salt.
Posted by: Blip | Sep 24, 2008 12:33:58 PM
Shouldn't the headline be: McCAIN TAKES WIDER STANCE THAN BARNEY FRANK IN PAY DISPUTE?"
Posted by: ricky | Sep 24, 2008 12:33:04 PM
John McCain is practicing knee jerk politics. He makes these comments based on their sound byte quality rather than any actual policy application.
Posted by: Danny | Sep 24, 2008 12:29:16 PM
An earlier headline of this blog read: "WHILE ON TICKET THAT HAS OPTED OUT OF FEDERAL MATCHING FUNDS, BIDEN SEEKS THEM FOR FAILED PRESIDENTIAL CAMPAIGN." With only minor changes, this entry could read:
WHILE ON TICKET RUN BY PAST RECIPIENTS ON OBSCENELY INFLATED CORPORATE PAYOUTS OR BUY OFFS, McCAIN SEEKS THEM FOR FUTURE RESCUED COMPANIES.
See, no disconnect. While more consistent, I like the heartburn the current head will give to the religious right. McCain more liberal than Barney Frank. Priceless.
Posted by: ricky | Sep 24, 2008 12:28:27 PM
This is getting elected liberalism, nothing long term. McGrandStanding
Posted by: Perspective | Sep 24, 2008 12:27:02 PM
I have lost all respect for Senator John McCain.
He will say or do anything to get elected.
Well who can blame him. At 72, it is his last shot at the WH.
Mr. McCain, let the lies continue and let the pandering continue.
Posted by: Dare Nigeria | Sep 24, 2008 12:18:52 PM
So, as I see it, according to John McCain, college football coaches should make more than the Vice-Chair of UBS, Phil Gramm? Will Phil be joining him at the press conference when they announce the pay cut?
Posted by: ricky | Sep 24, 2008 12:14:13 PM
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