Friday, July 31, 2009

Politics: FINALLY! House Votes to Restrict Wall Street Bonuses

WASHINGTON - DECEMBER 9:  Former Freddie Mac C...CEO Looking a Little Nervous...? WASHINGTON - DECEMBER 9: Former Freddie Mac CEO Richard Syron (L) adjusts his tie while testifying with former Fannie Mae CEO Daniel Mudd (R), and fromer Fannie Mae CEO Harold Raines (C) before the House Oversight and Government Reform Committee during a hearing on "The Role of Fannie and Freddie Mac in the Financial Crisis" on Capitol Hill December 9, 2008 in Washington, DC. The hearing focused on the financial collapse of Fannie Mae and Freddie Mac, their takeover by the federal government, and their role in the ongoing financial crisis.Image by Getty Images via Daylife
From Denny: This just in from the Friday afternoon news cycle... Congress knows the public is seriously ticked off about the greed on Wall Street. They took advantage of us from the TARP money that was supposed to keep them afloat and the economy from tanking as the conventional wisdom went. When I first heard of it when Bush was on his way out of office I knew it was the Republican's last parting shot of "screw over the public" yet one more time "because we can." So, they did.

All they did with the TARP money was bonus themselves and continue greedy unwise short-term vision business as usual. Big business is now feeing their customers into the poor house as a result of feeling free enough to play with taxpayer money. The big banks, even Royal Bank of Scotland who got money from two countries - United States AND United Kingdom - decided to use their bail-out money to enhance their profit bottom line for the quarter. They even publicly said they saw no reason to start lending out the money to the public they were given for that express purpose.

What was voted upon and passed in the House by a 235 - 135 margin just minutes ago was a measure to prohibit pay and bonus packages that encourage big risks by bankers and traders, the kind of risks that can take down the economy like a house of cheap cards.

Just yesterday these big banks have bonused over $1 million to over 5,000 employees with the public money of billions. Voters are outraged. Europe and other investors outside America have called for this kind of reform for decades. They thought it was unbridled greed a long time ago and advised Bush and Cheney to do something about it. Of course, Bush and Cheney foolishly refused. What did you expect? You put two greedy American former CEO's - Bush who had bankrupted no less than eight companies - in charge of the candy store with a country's treasury and you think they would not go wild? Come on. They now had something to trade for big bucks to keep them in power:  public funds.

Get this: even though House Republicans are fully aware of voter outrage, they still chose to dance to their lobbyist masters and vote AGAINST the measure. Unbelievable. Their sorry excuse of a claim? They weakly offered up, "Severe restrictions should apply only to banks that accept government aid."

So just what is the legislation banning in regard to risky compensation? This will apply to any firm with $1 billion in assests. That would include bank holding companies, broker-dealers, credit unions, investment advisors, and mortgage buyers Fannie Mae and Freddie Mac.

Prospects in the Senate are uncertain for this bill. You might want to start haranguing your Senators into voting for this bill now. The Senate Banking Committee is expected to take up this bill in the coming weeks after recess. It will be part of broader bill overhauling financial regulations.

What suggestions did President Obama ask to be included in this bill?

* shareholders get a nonbinding vote on compensation packages.

* prohibit members of compensation committees from having financial ties to the company and its executives (you know like Bush and Cheney did to Haliburton and others)

Finally, Congress is bowing to public pressure to deal with corporate greed. This is a good first step. The Senate had better get on board and sail this measure right on through or there will be a rush to "throw the bums out" come election time, and, these are the midterm elections coming up this November. Use your vote wisely.

Royal Bank of Scotland, big business, Wall Street, Republican Party, Dick Cheney, United States, Bank, Troubled Asset Relief Program, Business, Fannie Mae, Barack Obama, Freddie Mac, politics, big business