Of billion dollar handouts and salary caps

President Obama has at least started the debate on how to bring some sanity to executive compensation at failed (looted) financial firms that seek government money. But at the outset, the proposal the new administration has put forth has loopholes big enough that one wouldn’t need James Bond at the handles to guide a golden parachute through it.

Chief of Goldman Sachs, Lloyd Blankfein

Chief of Goldman Sachs, Lloyd Blankfein

Executives at Chase and other recipient firms are already claiming exemption on the grounds that receiving only twenty or so billions is not ‘exceptional assistance’ which it the putative level at which government controls would begin.

What is needed at this point is nationalization. What Sweden did with its’ failed banks in the 90s. That gives the administration full control over the boardroom and the CxO offices. If the banks regain health, the taxpayers can reap the benefits of LBO-ing them back to the executives and private equity funds.

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