Last Wednesday, Barack Obama put a $500,000 salary cap on executives of companies receiving federal bail-out money. The Associated Press described it as “an unusual government intervention in corporate America,” and it is. Normally, corporate America seems to get whatever it wants – at the taxpayer’s expense and with no oversight at all.
The sad part is that we need this legislation. As the AP reported, Wall Street firms paid out over $18 billion in bonuses to execs in 2008 – with taxpayer money. Think about it. These execs have run their businesses into the ground to the point that the government has to give them hundreds of billions of dollars, and they have the audacity to give themselves billions of dollars in bonuses with our money! As Obama himself said, “what gets people upset, and rightfully so, are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.” He’s right. We are sick of it.
Now, I have heard people who say that this salary cap is “communistic,” that it sounds like “wealth redistribution.” These complaints are, no doubt, from the same people who kept calling Obama a Marxist throughout his whole campaign. However, there’s nothing “Marxist” about it. The bail-outs themselves are “wealth redistribution” of the worse kind. They are a reverse communism, if you will: They take from the poor/middle-class (taxpayers) and give to the rich (multi-billion-dollar industries). Obama’s salary cap at least makes sure our money goes to help the businesses, and not buy yachts and mansions for the super-rich failures.
The salary caps should also work to make sure the bail-out money is more of a loan than a hand-out. If the executives want to make over $500,000, they have to be paid in stock until they pay back the bail-out money. This also means the executives might just try to get their company’s stock out of the red.
Obama’s also working to eliminate the massive severance packages for executives leaving failing companies, said the AP. This is another sadly necessary measure. It is far too easy, and too common, for executives to jump out of a sinking ship, yet somehow vote themselves hundreds of millions of dollars in “golden parachutes.”
I have no problem if you make a lot of money, but when your business is failing and you’re receiving corporate welfare money from the taxpayers, you can’t just take it and do whatever you want with it. It’s ridiculous, I would much rather have welfare go to a poor woman to get food stamps than for it to go to millionaires. I would much rather have billions of dollars go to people to get back into their homes that were foreclosed than it go to banks who deal with sub-prime mortgages. But if the money is being given to these failed corporations and crooked executives, at least this salary cap is a step in the right direction.