yo freedomclub ,
Obama Orders Pay Limits at Banks Getting Future
Aid
(Please check bloomberg )
I have no idea how to put in link .... damn
On Wednesday, President Barack Obama announced measures that
purport to restrict executive compensation to $500,000 at financial
institutions receiving billions in government assistance. The
figure does not include stock options, which could be redeemed
after financial firms pay back loans from the federal government.
Nor does it apply to the original recipients of tens of billions in
TARP (Troubled Asset Relief Program) money.
The measures are essentially a public relations exercise. Their
aim is to provide political cover for a new and even larger Wall
Street bailout, which Treasury Secretary Timothy Geithner will
unveil next week.
Yet the discussion that has emerged in the wake of Obama’s
announcement sheds light on the domination of government by a tiny
financial elite and the increasingly threadbare pretense of
democracy in the US. This financial aristocracy, the episode
reveals, is a power to be approached on bended knee.
The media have responded to Obama’s proposal of a $500,000 limit
on executive compensation, which would affect only a handful of firms, as
though this were a severe and astonishing punishment. Yet the
figure represents approximately 12 times the annual salary of the
typical worker. To the majority of the population, a salary of a
half million dollars is a staggering amount of
money.
Obama’s servility before the financial aristocracy was summed up
by the reassurances he gave it in announcing his limits on
executive pay. “This is America,” Obama said. “We don't disparage
wealth. We don't begrudge anybody for achieving success.”
Such a vision of America is at odds with both its present
circumstances and its history, which has been characterized by deep
democratic and egalitarian traditions that date back to before the
Jeffersonian democracy of the early Republic. And while liberals
are busy attempting to equate Obama to Franklin Roosevelt, the
latter, in the midst of the Great Depression, attempted to
capitalize on the tremendous contempt for the rich in the
population at large by regularly issuing bromides against the
“money changers.”
Indeed, Obama’s obsequiousness stands in sharp contrast to the
anger of the working masses, who find it incomprehensible that
the same executives who are
responsible for ruining the economy and squandering trillions in
taxpayer money are now presented with pay “limits” of a half
million dollars. Workers are wondering why there haven’t been
criminal indictments and television scenes of handcuffed executives
frog-marched from their offices.
But on Wall Street,
$500,000 is considered a pittance. The New York
Times reports that executives felt cheated by taking home “only”
$18 billion in collective bonuses in 2009. “I feel like I got a
doorman’s tip, compared to what I got in previous years,” an
investment banker with Citigroup told the Times.
The Financial Times reported on Wall Street’s opposition to the
largely token measures. “Senior bankers were quick to warn the
plans would cause a ‘brain drain’ from the profession as top
executives seek more rewarding jobs out of the public eye,” it
wrote. “Unlike other careers where job satisfaction and other
considerations play a part, finance tends to attract people whose
main motivation is money.”
“‘The cap is a lousy idea,’ complained one top Wall Street
executive. ‘If there is no monetary upside, who would want to do
these jobs?’”
Andrew Ward, a University of Georgia professor and specialist on
corporate boards and management, told the Financial Times that
executives could respond to Obama’s measure by calling his
bluff—refusing to allow their firms to accept a bailout that would
in any way limit their personal enrichment. “One of the potentially
unintended consequences is that executives might try and hold off
asking for government assistance until it is too late,” Ward
said.
Media and academic figures who have tried to argue that the
massive pay packages of the Wall Street executives are somehow
legitimate, or even rational, succeed only in revealing the rot
that characterizes intellectual life in the US.
Their central argument—that
the same CEOs who have driven their companies and the economy as
whole into the ground are worthy of remuneration in the tens of
millions—is so absurd it is almost an embarrassment to
answer.
The immense power of the financial elite is revealed by the case
of Bernard Madoff, the investor who squandered more than $50
billion in wealth in a giant Ponzi scheme. While working class
Americans are arrested and spend years in prison for far lesser
offenses, Madoff remains ensconced in his Manhattan penthouse.
For nearly a decade, a whistleblower named Harry Markopolos, who
had uncovered Madoff’s scheme, attempted to draw the attention of
the Securities and Exchange Commission (SEC), the federal
regulatory agency ostensibly tasked with policing the securities
and stock industries. Instead, the SEC ran interference for Madoff.
Rather than being applauded for his efforts, Markopolos feared for
his safety. “We knew that he was one of the most powerful men on
Wall Street and in a position to easily end our careers or worse,”
he said.
The social psychology and physiognomy of the financial
elite—with its wealth, special privileges and its control over the
organs of public opinion—resembles nothing so much as a modern
aristocracy.
Any discussion of a rational attempt to find a solution to the
economic crisis runs immediately into the ferocious opposition of
this elite. Similarly, in the 18th century the aristocracy of the
French ancien regime precipitated a financial crisis through its
avarice and wars. When the aristocracy convened the Estates General
in 1789, it was to demand that the Third Estate, the commoners,
bail the aristocracy out of the crisis of its own making. But the
monarchy and nobility refused to cede a bit of its power and
privileges. This set the stage for the great French Revolution.
The odious subjective
characteristics of the US financial aristocracy—its greed,
arrogance, stupidity and decadence—are themselves deeply rooted in
objective historical developments, the social expression of an
underlying economic process. The rise of this narrow social layer
with its obscene levels of accumulation is inextricably bound up
with the decline of American capitalism in the world market and the
gutting of its domestic industrial base. Indeed, what makes the
whole process so filthy, what imparts to it such a decadent and
repulsive character, is the degree to which this wealth is
unconnected to any progressive economic process. It is in every
sense destructive and reactionary.
In an earlier period of history the US had its “robber barons,”
such as Cornelius Vanderbilt, Andrew Carnegie and John D.
Rockefeller. As brutal and greedy as these men were, their wealth
was bound up with the creation of enormous industrial empires. The
latter-day robber barons of Wall Street, on the other hand, have
made their billions from the destruction of the industry and
productive capacity built up over decades.
The staggering wealth
accumulated in the top one percent of American society over last 25
years is directly bound up with the deterioration of the economy,
the decline of industry and the impoverishment of the working
class. The enormous personal fortunes of the elite
have been built up on hedge funds, the leveraging of debt and other
forms of financial speculation. This has entailed an enormous transfer of
resources out of manufacturing and into finance, and out of the
working class and into the pockets of those who have played the
critical role not only in destroying living standards, but in
setting the stage for the present disaster.
The fortunes that grew on this basis at a certain point assumed
a dynamic of their own. Their sheer scale assumes a malignant
character that becomes an insurmountable obstacle to any rational
policy coming from within the confines of bourgeois politics.
It follows that there is no solution to the crisis without a
direct and massive assault on social inequality, and thus the
wealth and privileges of the financial and business aristocracy.
This cannot be carried out by pressuring the Democratic Party. The
Obama administration’s meager rules on executive pay shows that it
will not consider any policies that even hint at the redistribution
of wealth.
The American political
elite, Obama included, is tied by a thousand strings to the
financial aristocracy. The Obama administration is populated by
individuals who have parlayed their political positions into
lucrative positions in finance. Virtually the entire cabinet fits
this billing—not only Tom Daschle, the former senator who withdrew
his nomination for the Secretary of Health and Human Services
amidst revelations that he had withheld tens of thousands in taxes
owed on payments he received from his corporate
sponsors.
Yesterday it came to light that Leon Panetta, Obama’s nominee
for chief of the Central Intelligence Agency, took home more than
$1 million last year through payments from corporations for
consulting, speaking appearances and through his membership on
corporate boards. He was paid handsomely for speeches by financial
firms that have since collapsed, including $56,000 by Merrill Lynch
and $28,000 by Wachovia. Chief of Staff Rahm Emanuel and Secretary
of State Hillary Clinton have also used their political connections
to make millions from the same financial elite that would
ostensibly be targeted by Obama’s rules on executive pay.
Obama knows very well that when he leaves office he will be able
to make millions of dollars, as Bill Clinton, the last Democratic
president, and countless other leading politicians have done. Nor
would this be a departure for Obama, whose career was taken into
hand early on by leading financial and political figures in
Chicago.
The subordination of the whole of society to the financial
aristocracy is most clearly expressed in the massive bailout of
Wall Street. Its political representatives, Democrats and
Republican alike, hand over trillions to the biggest banks, while
providing no provisions for the masses of people who have lost
their jobs and homes.
Millions of workers who
voted for Obama are now coming face to face with the fact that his
administration will defend the interests of the financial elite
every bit as ruthlessly, if with a slightly different presentation,
as the Bush administration.
The solution to the economic crisis is not a technical question
but a social, political and revolutionary settling of accounts, and
a historical necessity. At a certain point in the late 18th
century, it became necessary for the oppressed classes of France to
rise up and destroy the power and privileges of the nobility. In
the America of the 1860s, the only resolution to the “irrepressible
conflict” was the destruction of the “slave power” in the
South.