How to Save Finance: Pay Caps
Well, well, well … it looks like Goldman Sach’s doesn’t really want the TARP bailout loans after all:
Is it any coincidence that on the same day that the Obama Administration announces restrictions on executive pay for companies taking government bailout money, Goldman Sachs announced that it is pulling out of the government’s Troubled Asset Relief Program?
The investment bank, says CFO David Viniar, is chafing under the restrictions that came attached to its $10 billion loan. The new pay rules, which could be applied to existing TARP participants in a later iteration, may have been the last straw. “We would like to get out from under that,” said Viniar. Goldman intends to pay back the loan by the end of the year.
From the Heritage Foundation’s The Foundry blog.
The Foundry labels this an “unintended consequence”. Usually that phrase is reserved for negative results that were not anticipated. For background, the pay cap limits executive pay to a mere half a million dollars, a sum that evidently doesn’t warm the hearts of the men who have destroyed our financial system, run their companies into the ground, and deserve to be sued by their stockholders rather than garner bonuses.
I think its about the greatest thing the Obama Administration has come up with. Not that they knew what they were doing; it is “unintended” that some would refuse the TARP money. The Administration has obviously have been trying their hardest to stuff money into any pocket that will take it. But the salary cap will have the effect of appealing to the entrenched short-sighted, damn-the-rest-of-you attitude of the country’s chief executives and boards of directors. And the less of these … excuse me here … bastards that take our money to bail them out of their own mistakes the better.
