I have to admit I’m spending a lot of time reading the latest news about the potential bailout on Wall Street. The latest is that they are considering adding executive compensation caps to the proposal. I still haven’t read anything about limiting the power and scope that this proposal would give to the executive branch. The two things that bother me most about this potential bailout are the total dollars that they are considering giving to financial firms with very little guidelines, and the wording in the plan that talks about the treasury wielding this authority with no judicial or any other type of oversight.
I think what makes me even more nervous about this plan is seeing data like this:
http://abcnews.go.com/Business/Economy/story?id=5876413
In this article they highlight the huge salaries and bonuses that these CEO’s are being paid. If you look down the page you’ll see that one of the highest paid people on the list was the same person that is calling for this massive taxpayer bailout, Henry Paulson. Prior to working in the administration he was the CEO of Goldman Sachs. Paulson made nearly $180 million dollars over 3 years from 2004-2006. Now, he is asking all of us to trust him to use $700,000,000,000 of our money (or should I say our future debt) to save some of the very same firms that he has been involved in. It all smells like a large garbage can of rotten fish.
I still believe the right answer here is to let the chips fall where they may. Either way we are going to experience a large impact in our lives. At least, without the bailout, we’ll have $700 billion more of other people’s money to take care of individuals until the economy improves.
Thank you for pointing out what others have missed in Paulson’s background. He is part of the problem. And you are correct in that there are rough times ahead regardless of the final structure of the bailout plan.
What baffles me is that most people don’t see that this bailout will save the jobs and savings of millions of Americans. I believe strongly in free markets with limited government intervention, however there comes a point where we have to act to problems that occur in the financial system. The great depression was a great example of what can happen when financial institutions aren’t regulated.
I can’t believe that I am saying this (I am a very conservative individual), but I see this as a feasible solution. Paulson and Bernanke were talking about only using half of the bailout money initially then if there would be further problems they would invest the other half.