Obama sets maximum wage.

[ladiesbballcoach]

Have any of you folks ever had a business loan? They are called loan covenants and a loan covenant that restricts how much money can be taken out of the company is very common. Not only that, in a small corporation the officers would also be asked to pledge their personal assets. These restrictions only last until the federal loans are paid off. More importantly, executives can be compensated with stock options that are redeamable after the federal loans are paid. If these "best and brightest" do a good job of bringing the company back, they stand to make a lot of money on the stock. There is one other factor. These folks are getting federal loans because their companies are in no position to get commercial loans. Doesn't seem unreasonable to me.

 

I had not ever heard of that. Thanks for the edification.

[HHSDad]

I have no problem with it being tied to bailout money.

I agree. If they were getting the money from a bank, they would probably see similar loan covenants. So, if you want our bailout money, then you have to play by our rules.

[Getslow]

Have any of you folks ever had a business loan? They are called loan covenants and a loan covenant that restricts how much money can be taken out of the company is very common. Not only that, in a small corporation the officers would also be asked to pledge their personal assets. These restrictions only last until the federal loans are paid off. More importantly, executives can be compensated with stock options that are redeamable after the federal loans are paid. If these "best and brightest" do a good job of bringing the company back, they stand to make a lot of money on the stock. There is one other factor. These folks are getting federal loans because their companies are in no position to get commercial loans. Doesn't seem unreasonable to me.

 

This isn't small business. A small business will provide goods and services to a locality in which they are the primary option. Capping salaries will almost certainly drive finance overseas or into other schemes outside the reach of federal regulators. The downturn will do its own job at adjusting executive salaries, a task the government is decidedly bad at. If I'm not mistaken, early in President Clinton's first term, Congress attempted to set executive pay, an action which resulted in many of the complicated pay schemes involving pensions and perks that made it VERY difficult to determine what executives were actually getting paid. I understand that there are regulatory safeguards that are going to be put in place as a result of this crisis, but this is not a task to which Congress should set itself.

[rockmom]

This isn't small business. A small business will provide goods and services to a locality in which they are the primary option. Capping salaries will almost certainly drive finance overseas or into other schemes outside the reach of federal regulators. The downturn will do its own job at adjusting executive salaries, a task the government is decidedly bad at. If I'm not mistaken, early in President Clinton's first term, Congress attempted to set executive pay, an action which resulted in many of the complicated pay schemes involving pensions and perks that made it VERY difficult to determine what executives were actually getting paid. I understand that there are regulatory safeguards that are going to be put in place as a result of this crisis, but this is not a task to which Congress should set itself.

 

 

If these companies want to play by their own rules, then don't accept government money. It's simple. That's the way the freemarket concept works. Once you accept taxpayer money, that business belongs to me (a "stakeholder"). I get a say. I agree with Obama's position here. This is appropriate. Of course, I'd hazard a guess that those who are interested in really doing what is right and feel that the bailout money is needed, will accept this provision as a "necessary evil" of getting the money needed to get their business back on track.

[Getslow]

If these companies want to play by their own rules, then don't accept government money. It's simple. That's the way the freemarket concept works. Once you accept taxpayer money, that business belongs to me (a "stakeholder"). I get a say. I agree with Obama's position here. This is appropriate. Of course, I'd hazard a guess that those who are interested in really doing what is right and feel that the bailout money is needed, will accept this provision as a "necessary evil" of getting the money needed to get their business back on track.

 

I don't think the banks or the Big Three or whoever should have been bailed out in the first place (with isolated exceptions), but what I'm saying is that you can't have your cake and eat it too. You can't give out money in the hopes that it props up the financial system but then also hamstring the companies with rules for using this money and expect growth. It achieves one end of the plan (to allow members of congress to get on TV and talk about how they are reining in the fat cats) but may fail at the other end (actually helping get us out of this recession).

[rockmom]

I don't think the banks or the Big Three or whoever should have been bailed out in the first place (with isolated exceptions), but what I'm saying is that you can't have your cake and eat it too. You can't give out money in the hopes that it props up the financial system but then also hamstring the companies with rules for using this money and expect growth. It achieves one end of the plan (to allow members of congress to get on TV and talk about how they are reigning in the fat cats) but may fail at the other end (actually helping get us out of this recession).

 

 

I don't think so either. But, it was done. If a business wants money from the government, it has strings. If they don't want those strings, then by all means, find the money somewhere else, pay your CEO's, whomever, what you want. Maybe this will be the incentive that businesses truely intent on returning to glory need to get off the gravey train and tough it out themselves.

[Getslow]

I don't think so either. But, it was done. If a business wants money from the government, it has strings. If they don't want those strings, then by all means, find the money somewhere else, pay your CEO's, whomever, what you want. Maybe this will be the incentive that businesses truely intent on returning to glory need to get off the gravey train and tough it out themselves.

 

But if you DON'T take government money, then you have put yourself at a competetive disadvantage and deprived your company of free money... how do you tell that to your shareholders? Government intervention has already placed its hand into the market... the second the bailouts started coming, the market wasn't free.

[rockmom]

But if you DON'T take government money, then you have put yourself at a competetive disadvantage and deprived your company of free money... how do you tell that to your shareholders? Government intervention has already placed its hand into the market... the second the bailouts started coming, the market wasn't free.

 

 

The money isn't, shouldn't be, and can't be "free money".

[Getslow]

The money isn't, shouldn't be, and can't be "free money".

 

Really? What would you call it?

[Habib]

I don't think so either. But, it was done. If a business wants money from the government, it has strings. If they don't want those strings, then by all means, find the money somewhere else, pay your CEO's, whomever, what you want. Maybe this will be the incentive that businesses truely intent on returning to glory need to get off the gravey train and tough it out themselves.

 

:thumb:

[bballfamily]

When you go asking for a handout you should expect to have some rules to go along with the handout.

The only problem here is the Marxists on the left hope to spread this throughout our system and regulate everthing eventually.

[rockmom]

Really? What would you call it?

 

 

The bailout may be money that they don't pay back. Frankly, I don't know exactly what it is. But to be truely "free" there are no strings attached. That was never promised, and never should be.

[Sting]

If we put a cap on what CEO's can make, why can't we put a cap on what union auto workers make?

 

I think if we cap one, we should cap both. That would be an excellent compromise.

[formerkywrestler]

I don't believe in the bail out system at all so I don't think this should even be an issue. But since we are sliding full blast down that slope, I'll throw in my .02.

 

I see Rockmom's side that this money shouldn't be free and there should be stipulations to it. But I don't see how we can honestly expect these companies to recover without allowing them the chance at new leadership. And in order to get new leadership...it is going to come at a price. (Honestly, I doubt we are ever free of this until total failure happens)

[Getslow]

The bailout may be money that they don't pay back. Frankly, I don't know exactly what it is. But to be truely "free" there are no strings attached. That was never promised, and never should be.

 

I've never said that it shouldn't come with strings. There will be all sorts of regulations tied into this money. I'm saying that, at the very least, THIS string is a rotten one. The regulations will undoubtedly be numerous... the danger of overregulation to compensate for the last couple years is very real... but many of the regulations will be industry-wide, why would you restrict regulation only to those that are accepting government money? Those that haven't yet gone under could still do something dumb. I just think that attaching too many limitations on this money may prevent these particular corporations from EVER recovering correctly. But just because it has strings doesn't stop it from being "free" in the sense that it will cost them nothing financially which, in the end, is all the shareholders are going to care about.