A Shot Across the Bow

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I’m pretty sure that Lefty High Command has instructed us not to refer to the Obama administration’s “coordinators” as czars anymore, but anyway, Obama’s pay czar has apparently decided to show that he’s no potted plant.  Kenneth Feinberg announced today that banks that got a big chunk of bailout aid will have to rein in their top managers:

The seven companies that received the most assistance will have to cut the cash payouts to their 25 best-paid executives by an average of about 90 percent from last year….Total compensation, which includes bonuses, will drop, on average, by about 50 percent.

The companies are Citigroup, Bank of America, the American International Group, General Motors, Chrysler and the financing arms of the two automakers.  At the financial products division of A.I.G., the locus of problems that plagued the large insurer and forced its rescue with more than $180 billion in taxpayer assistance, no top executive will receive more than $200,000 in total compensation, a stunning decline from previous years in which the unit produced many wealthy executives and traders.

There’s certainly some justice in this.  But I’d prefer something less punitive and more useful: a limit on the total bonus pool at these banks.  The point isn’t just that executives who imploded their companies don’t deserve huge paydays — though there’s a lot to be said for that — it’s that financial companies in trouble should be using their retained earnings to build up their capital base, not to pay their staffs outlandish salaries.  Today’s action is nicely symbolic, but insisting on a more wide-ranging cultural change that helps the entire system recover would be even better.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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