It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.
But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the “Pay for Performance Act of 2009,” would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.
The purpose of the legislation is to “prohibit unreasonable and excessive compensation and compensation not based on performance standards,” according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.
The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.
In addition, the bill gives Geithner the authority to decide what pay is “unreasonable” or “excessive.” And it directs the Treasury Department to come up with a method to evaluate “the performance of the individual executive or employee to whom the payment relates.”
Make sure you read the whole thing. How many of your banks took TARP Funds? Mine did . (If you want to find out if your bank took TARP Funds, click here.) It will only be a matter of time before regular hardworking Americans start getting screwed even more by this latest trampling of Constitutional Rights by the Obama Administration. I spoke with my accountant (while going over taxes)last week about TARP. When banks accept TARP funds, they have to adopt the regulations that come with it, including higher interest rates. She has a number of customers whose mortgage interest jumped by two full percentage points because their bank accepted TARP Funds. Anyone with a mortgage knows what even the slightest change in interest does to a 30 year mortgage. (For those of you who don’t, its a difference of thousands of dollars.) So tell me Obama, how is screwing over responsible, bill paying Americans going to help us in the middle of a housing crisis? By the way, the special inspector general appointed to oversee the bailout package, the Troubled Assets Relief Program (TARP), said that the $700 billion does not include the additional financing and associated programs run by the Federal Reserve and Federal Deposit Insurance Corporation. Once it is all added together, the $700 billion sum balloons to $2.9 trillion in taxpayer commitments. Oops! I guess they forgot to carry the 1.
This comes only days after Treasury Secretary Timothy F. Geithner told Congress the administration will seek unprecedented power to seize non-bank financial companies whose collapse could jeopardize the economy.
The government at present has the authority to seize only banks.
Allowing the Treasury Department to take over a broader range of companies, such as large insurers, investment firms and hedge funds, would mark a significant shift from the existing model of financial regulation, which relies on independent agencies that are shielded from the political process. The Treasury secretary, a member of the president’s Cabinet, would exercise the new powers in consultation with the White House, the Federal Reserve and other regulators.
“Our system permitted a scale of risk taking that has caused grave damage to the fortunes of all Americans,” Geithner said in testimony before the House Financial Services Committee. ” . . . We must create a new resolution authority so that the federal government has the tools it needs to unwind an institution of the size and complexity of AIG.”
Folks, in the history of the United States there has never before been such a blatant disregard for individual property rights and utter disrespect for businesses. Look at AIG. Politicians whipped up such a furor over AIG bonuses (that THEY (Chris Dodd et al) wrote into previous legislation to allow) that employee’s innocent spouses and children were getting open death threats. By the way, ringleader Chris Dodd accepted over $160,000 in political contributions from AIG in 2008. (Old news my ass Dodd, you’re a crook who should be Bubba’s cellmate in prison.)
And of course now we have government run Chrysler and General Motors. Yesterday Obama told GM CEO Wagner to step down, which he unfortunately did. Now less than 24 hours later, the new CEO is already saying “bankruptcy is the best option”. Republicans said this and initially blocked bailout attempts on this months ago! So we just spent $14 billion to bail out a company that’s going bankrupt anyway? We should have let them fail. That is why we have bankruptcy laws. The Detroit auto industry has been crippled for years by poor management, disposable gas-guzzling cars, and bloated union contracts that have been skimming money out of the company coffers for decades. Don’t believe me on the unions? How many unions own a $6 million golf course, a $33 million lakeside retreat (that has lost $23 million in the past five years alone), and hold over $1.25 billion in assets? United Auto Workers, like many unions in our modern times is nothing more than a giant leech on our economy. And people wonder why jobs go overseas and Americans are left jobless.
We are entering very scary times. Sure most of these companies are large, and may or may not affect you directly. Politicians are doing everything they can to whip people up into class envy to try and convince everyone that these “rich, evil corporations” deserve to be punished for making “too much” money. That’s right, its the GM CEOs fault you live in a trailer, drive a rusted out Geo Metro, and spend every dollar you have (that doesn’t go to child support) at the bar. (Please pardon the Wisconsin trailer-park rant.)
Let’s put things in perspective. The Obama administration is seizing businesses. They are seeking the power to seize even more. They are passing new legislation that grants them the power to RETROACTIVELY change wage contracts. With that type of power, Timothy Geithner could easily say “You’ve been getting paid too much money to do this job. You need to pay it back now or face wage garnishment.” If they are doing this to your friendly neighborhood bank (like mine, Associated Bank), how long until they move on to other businesses within your community? How long until the government comes after your business? What if you try to file for bankruptcy and instead the government says “we are seizing your business”? That is essentially what they are doing right now, and nothing is stopping them from coming after yours.
For all you middle-of-the-road Obama voters now having buyer’s remorse. We tried to warn you of this months ago. We told you he was radical. We told you he was a socialist. We told you he wanted to nationalize American businesses and financial institutions. We told you you wanted to take away individual freedoms and property. We told you he wanted to punish people for making money, by taking it away from hard-working Americans and giving it to people who do not work, pay taxes, or contribute ANYTHING to society. We are now facing a national debt the likes of which the world has never seen. (And no, Bush Derangement Syndrome hatemongers, Bush didn’t cause this. Obama has already surpassed his national debt in only 2 months in office). You didn’t listen. So I have to ask.
Is this is the hope and change you were looking for?