Bonus Bailout Still Safe

The Obama administration is slamming the door on an empty barn, it's an old ploy the corporations use placate shareholders without returning a single red cent. And now president Obama is protecting bankers compensation while scoring political points the same way.  That's a wicked double edge blade that slices the taxpayer both ways. You can read the restrictions are here  and get  Paul Kiel's take on them.

The bottom line: the restrictions are stricter than Bush's administrations, but provide plenty of wiggle room for execs to do well.  There is no real limit on executive compensation, just restrictions on the type of compensation.

And just like the Bush's weapons of mass destruction president Obama's tighter restrictions are largely mythical.

Executives at Goldman Sachs Group Inc., JPMorgan Chase & Co. and hundreds of financial institutions receiving federal aid aren’t likely to be affected by pay restrictions announced yesterday by President Barack Obama.

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.

Meaning the rules are written for those who write the rules!  The point of slamming the door after the horses are gone is nothing more for them to come back for. Any administration serious about correcting the economy would have the bail out  already doled out put back into the public coffers. This was not and so it didn't!

Obama, 47, “is not proposing to go back and get that $18.4 billion in bonuses back,” Laura Thatcher, head of law firm Alston & Bird’s executive compensation practice in Atlanta, said of the cash bonuses New York banks paid last year, the sixth- biggest haul in history. “Right now, we have not clamped down” on pay at banks.

Nor every clamped down on bankers  at banks. It is increasingly clear that the only ones to deliver justice to the bankers, will be  those in the streets with pitchforks in hand. The rest of Obama nation is too slow to see that with respect to the banks is no different then Bush.

“For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste, it’s a bad strategy, and I will not tolerate it as president,” Obama said yesterday.

But even that is a lie, as some of the banks that have been bailed up big time still aren't subject to the restrictions.

“What I’m a little bit surprised by is that those pay restrictions don’t apply to what I would call the double dippers, which is basically Citigroup and Bank of America, which have come back for capital,” said Charles Peabody, an analyst at Portales Partners LLC in New York. Both banks received money under the Treasury’s $700 billion Troubled Asset Relief Program, and required additional bailout funds and a government guarantee of their assets.

As for the banks themselves, 

The Financial Services Roundtable, a Washington-based trade group representing banks, called the restrictions “a measured response” in a news release yesterday.

I would call the news release measured. 

For some firms, the rules are insignificant. Morgan Stanley is among companies that don’t expect the restrictions to affect their business because they foresee no need for additional government help.

You can Still hear the hoof beats echoing in the distance. 

Just in case you don't think these bankers have worldwide control, consider that Gordon Brown Prime Minister of Great Britain who acknowledge the world is in a great depression still won't block the bonus for Royal Bank of Scotland's most heinous.

Gordon Brown signaled he won’t block bonuses to traders and junior executives at Royal Bank of Scotland Group Plc as lawmakers stepped up pressure on the U.K. prime minister to adopt a U.S.-style plan capping pay.

The only difference on that side of the pond is they make no pretense of propriety.

So here we are in the train wreck of the end of Ponzi finance,  and as the global Great Depression sets in the world government's number one priority is to carry executive compensation on the backs of taxpayers. Nuff said!