I don't care about CEO salaries when they are deserved. I do care when companies dole out money irresponsibly and then want a bailout.

Much like many of the investment banks, bankers, hedge fund managers, heads of Freddie and Fannie. They all just rode a bubble. Part of the restructuring has to include an ability to clawback compensation (or have it vest over time) based upon future performance, or lack thereof. The massive rewarding of whomever happened to have the biggest quarter led to increased short-term risk to the detriment of long-term, prudent investment choices, even when everyone involved knew they were premised on a ridiculously leveraged bubble.

An interesting read is Nassim Nicholas Taleb's book "Fooled by Randomness," where he points out that past success by an investment advisor or hedge fund manager doesn't mean he knows dick about anything; he may have just got lucky, and we get fooled by that randomness.

If they don't like the conditions they can take the chance and ride out their luck. I don't understand why Paulson (and or Whitehouse, if that is the case) are opposed to such severe conditions.

Because the bailout isn't about saving the economy?

1. As a conservative I don't like doing bail-outs, so that makes me want to be against one.

2. I also like job and economic growth, and don't want a huge recession, so that at least makes me want to consider the possibility of having to swallow hard and accept some sort of bail-out.

3. However, why must we rush into doing a bail-out, assuming we are to do one, and is the form of bail-out proposed by Bush the best alternative?

4. It makes me real nervous when the big spending republicans, like Boehner et al, are getting together with the I've had my hand in the cookie jar of mortgage business big spenders like Chris Dodd, to jointly tell us we have to do this emergency bail-out and it needs to be done immediately and without thought or debate.

Did anybody see the Dodd and Boehner love fest over the weekend on Meet the Press? I mean these guys were sitting close enough to be holding hands, they were backing each other up, and taking cues from one another. They both sounded exactly the same, and it made me feel like something bad was about to happen, because I don't trust either one of them.

5. Judging by the comments coming out of the democrats today, they will use any bail-out as the means to make one of the largest socialist grabs on the country in our entire history, and I'm definitely against that. I mean when Pelosi and Clinton are talking about great depression Roosevelt style socialist grabs with simultaneous anger and wistful longings, its time to bend over and pass the KY around.

I have to say after weighing the above, that right now, I'M AGAINST ANY BAIL-OUT. I'm especially against any bail-out that is rushed through without much thought and debate (remember the ill conceived we must pass this now immigration bill). When big spending crooked republicans get together with big spending crooked socialist democrats, and jointly tell us that they need a trillion dollars of our money, without thought, without debate, without proper consideration. Then I have to say I smell a big fat rat!!!!

So right now, what I'm hearing, I say screw the bail-out, screw the socialist grab on the country, and screw both the big spending democrats and republicans. Screw 'em all. NO BAIL-OUT. SARAH PALIN HAS IT RIGHT!!!!!!!!!!!!


Says the "Dog"

Bill Emmott, at The Guardian, lends perspective. h/t Oliver Kamm

Good grief. Whatever this is, it's not "socialism." Socialism is when the government owns and controls actual productive industries, and then by a very visible hand, makes those industries unproductive and crappy. In this case, we have the government basically buying up stuff that's already financial garbage, and hoping against all hopes that they can sell it again as soon as possible for even a portion of its former value. It's a gamble: it may be money entirely down the drain. But it isn't socialism.

I think the bailout sounds like a terrible idea, but let's please not talk pure nonsense just because it its whatever insane meaningless drivel the two Presidental campaigns are trying to sell people.

"SARAH PALIN HAS IT RIGHT!!!!!!!!!!!! "

Sarah Palin doesn't have a clue what is going on on this or any other subject. She just repeats some semblance of whatever her cram sessions have filled her with, and only if we're lucky does it come out again halfway coherent. Next time she tries to use the word "fungible" in a sentence, she might want to figure out what it means, or learn something about oil markets before proposing a plan for oil consumption that isn't even wrong: just totally incoherent.

So I guess Mr. Bad supports the bail-out, since Sarah Palin is against it.

I guess he has never heard the 10 minutes of stammering and uh's and oh's without creating a single coherent sentence that Obama has done for the media on more than one occassion. Not that you'd ever hear it or see it on the MSM, they are too busy worrying about the sex life of Sarah Palin's 17 year old daughter.

Says the "Dog"

Newt Gingrich on the subject.

The Club for Growth offers their view.

Karatz needed the money. He was bankrolling his then wife's, Sandra Lee's, cooking instruction show and cookbook series.

When his money ran out she left him and moved to Andrew Cuomo.

A blonde TV cooking instructor wife does not come cheap.

This post and subsequent comment by David Bernstein are downright misleading. Karatz's 2005 pay consisted mostly of stock gains. I.e., the company (which I believe he founded) did very well, both absolutely and relative to its peers, its stock appreciated, and he made a lot of money. In 2008, I fancy, he has lost a lot of money.

In addition, in 2008 Bruce Karatz had to personally repay 8 million he grabbed in stock option backdating.

DavidBernstein: What does KB's performance after 2005 have to do with the CEO's compensation in 2005? Can we take away your tenure on the grounds that you haven't performed as the university expected when they gave you tenure?

Happyshooter: That's a better point. But not the one that the original post made.

David Bernstein: You are going by stock price, I am going by ROE. I assure you, I know quite a bit more about the financial markets than any of the Conspirators.

Serious question for the lawyers:

The people responsible for CEO pay are the directors, who have a legal responsibility to ensure that the CEO's pay and actions are in line with shareholder interests. It is my understanding that they are personally liable for their actions as directors. The system has built-in checks and balances - the shareholder vote and civil lawsuits. In theory these mechanisms should be effective and require no additional government action. But they are apparently not getting used, and I can't figure out why not. I can think of a few possibilities, but none of them are compelling.

Does anybody with some real expertise know why we're not seeing a lot more shareholder lawsuits?

What Suzy said!