To get working class Americans to swallow the bailout plan, Congress, lead by the Democrats, had to add a few spoonfuls of sugar. One of those was a promise to put a cap on executive pay on Wall Street. However, it turns out that Wall Street compensation is almost as outrageous as before
So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of 3 percent from a year ago, according to an Associated Press review.Even now, when the bailout money is already flowing, no executives are taking pay cuts. To experts, the result was easily forecast
But executive pay experts said the regulations are too weak to spark major reform in the way companies compensate top officers, and too narrow in scope to change the pay structure that encouraged finance executives in boom times to take on enormous risks.Even Neel Kashkari, Paulson's right-hand man on the bailout and a fellow ex-Goldman Sachs executive, told executives that he would protect their pocketbooks
Attempts by Congress to make beneficiaries pay for their mistakes, such as placing caps on executive pay, were "quite reasonable" and "a pretty modest hindrance to you," he told them, according to a recording of the Sept. 28 conference call made public on video-sharing Web site YouTube.As Dean Baker, whose blog has been quite helpful, points out
The public should continue to follow this issue even if the media does not. They should keep asking the members of Congress who touted the pay restrictions in the bailout bill which executives are getting their pay cut.That's a particularly good question to ask when President Obama tells us that we will all have to sacrifice to get through these trying times.
Lest we forget, Obama played an instrumental role in getting the bailout passed, and liberal Democrats like Tammy Baldwin also helped sell the idea that the bailout would cut executive pay. This is the American ruling class' B-Team at work.