Word: bailout
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...this week, Treasury Secretary Geithner and President Obama have both taken some responsibility for the fact that AIG employees got large bonuses which were, if effect, paid from government bailout money. Senator Chris Dodd, who may have had a role in allowing a loophole in a bill which let the AIG compensation slip through, refuses to be cast as the villain who let bankers make more money than they deserved. (See 25 people to blame for the financial collapse...
...time when anger over executive pay, particularly in the troubled financial sector, is boiling over. On Thursday, the House overwhelmingly passed a bill that would impose a 90% income tax on all compensation over $250,000 earned by employees at banks that have received more than $5 billion in bailout funds. The Senate is working on its own bill to raise taxes on highly compensated bankers. President Barack Obama indicated he would sign legislation that curtails bonuses...
...bonus scandal could make that repair job even harder than it already is. Growing doubts about the Administration's revitalization plan have now mushroomed into a full-blown credibility crisis. After all, how can Obama ask for upwards of another $750 billion for another bank bailout (as he has in his 2010 budget) and $100 billion to help the world economies, when it appears the Administration has had little control over how the banks have been spending the money thus...
...another approach would make far more sense (I am brazenly stealing it from financial blogger Steve Randy Waldman): impose a less punitive (50%?) but retroactive tax on the past four years of bonuses above a certain amount ($1 million?) paid out by any financial institution that receives a bailout. That is, spread the net wider to catch the real culprits, and use tax policy to change incentives in the financial industry forever...
...employees of AIG, Citigroup and the like are overseas and not subject to U.S. taxes. But it's worth a try. If nothing else, it would give the outraged American electorate the sense that the responsible parties are paying for something closer to their fair share of the financial bailout. Which would allow us all to get back to the Important Things that Larry Summers and Tim Geithner (and I) would rather focus...