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Long overdue, but somehow I suspect this will not be fully implemented or people will find a way around it.

DevoDoc wrote:

radarman wrote:

No, they will be jumping ship. It's already started.

While I certainly won't mind seeing BoA squirm, the fact is; this could result in these firms being at a severe disadvantage compared to firms that returned the bailout money.

This.

These guys are all heading for Goldman or overseas or starting up their own hedge funds.

The bailed-out firms will only be at a "severe disadvantage" if the economy takes off and the unrestricted firms get lucky rolling the dice with their usual over leveraged risk taking. I never bought that "smartest guys in the room" bullsmurf.

It depends on how far down the chain it goes. Sure, you may not be losing super geniuses, but if enough good employees leave for better pay elsewhere, you will still be at a disadvantage.

This is purely a political move, and a bad one. Restricting bonuses would have been just as effective, but not as politically advantageous. Even at that, restricting bonuses could result in employee flight.

The worst part is that it is highly selective. Goldman paid back their TARP money, so they can pay what they like. Citigroup hasn't, so they get screwed.

I fully expect this to turn into a fiasco.

radarman wrote:

No, they will be jumping ship. It's already started.

While I certainly won't mind seeing BoA squirm, the fact is; this could result in these firms being at a severe disadvantage compared to firms that returned the bailout money.

So firms that hire the people who tanked their own company are at an advantage somehow?

The point here is to make them pay back the bailout money as soon as possible, something I doubt they would have had any incentive to do otherwise. Then they can reward their employees however they like.

Title should read "majority owner trims costs" or perhaps "majority owner aligns interests of executives with interests of company."  A more tabloid might say "white knight investor reminds would-be highly paid people why they still have a job."

I'm beginning to think more and more that the bailouts were a really bad idea. We should have let the system collapse. The smurfs on Wall St have learned nothing.

Can capitalism really be self regulating? It's not really a marketplace but rather an idea of how a marketplace can be run. As an "ism" it's an idea(l). Are ideals workable, or do they require management?

Bailing out, as a last resort, might just fall under the broader category of all the stuff that must collectively be done to keep this particular "ism" functioning. From minor local regulations, to taxes to outright temporary takeover; this may be as much a legitimate and basic part of capitalism as  is currency, banking and interest.

I think depositors should have been bailed out, but not the banking institutions. We need some creative destruction and some consequences for making poor decisions. I would have rather seen the government help out the people on Main St rather than Wall St. It was right to allow Lehman to fail and Bear should have been allowed to fail along with AIG. I do agree that too big to fail is too big to exist.

But this situation was largely due to a lack of proper regulation. That oversight has yet to be implemented. Cutting back on the protections instituted after the Great Depression was a bad idea and both parties are guilty.

You know, for $701B, we could have paid off the mortgage of every American, or at least transferred the mortgage to the government, and completely solved the toxic asset issue overnight.

This would have resulted in many of those homeowners having an extra grand or two every month to spend or use to pay off other debts. Sure, some (many?) would squander the opportunity, but a lot of people would have used that opportunity to get out of debt, and stay out of debt.

What could you do if you didn't have a mortgage? (for those who own homes, of course...)

Sure, it's a huge moral hazard, but would it have been any worse than the one we created with the current bailouts?

A 90% tax rate on earnings over one million dollars is looking better and better everyday.

I don't like that so many are getting bonuses for being less bad than others. Every place I've ever worked, that would maybe earn you the ability to keep your job, while the others were let go.

Boy are they wimpy crybabies, or what? I have little sympathy for them.

sturner wrote:

I don't like that so many are getting bonuses for being less bad than others. Every place I've ever worked, that would maybe earn you the ability to keep your job, while the others were let go.

Never worked a Union job, eh?