Look, I’m all for reforming the way Wall Street does business, and I agree that this would ultimately include finding some way to bring top executive compensation down to a reasonable level. But why is this the most important thing in the current crisis? Is there some subtlety of economics I’m missing (entirely possible)?
Democrats in Congress are pushing for a slower and more deliberate pace to the process of aiding Wall Street out of it’s current crisis. Bravo. But why the sudden inclusion of executive compensation? Are we going to risk forcing issues and looking petty in the face of a crisis? I don’t get it:
“We want to limit those as a condition for giving them aid,” Frank, D-Mass., told ABC’s “Good Morning America.” “If Secretary Paulson would agree to that, we could move quickly.”
Rep. Christopher Shays, R-Conn., who also serves on the panel, said members “need enough time to debate this” and echoed Frank’s concerns about executive pay. “We don’t have these great golden parachutes and so on. In the end we’re doing it for the taxpayers.”
Oversight is certainly a proper demand. Reforming banking rules is a good idea – like, for example, erecting the wall separating commodities trading and mortgages that Phil Gramm destroyed in the Ninties would be a good start. Keeping banks on the hook for the difference between what the government spends in the bailout and what it gets back from selling off assets is an excellent suggestion.
But executive compensation? Is that really going to change anything?