Obama in Blunderland
The extract below is from an article at the FT on the tax measures being proposed in the US, following the payment of bonuses to AIG staff.
Bankers on Wall Street and in Europe have struck back against moves by US lawmakers to slap punitive taxes on bonuses paid to high earners at bailed-out institutions.
Senior executives on both sides of the Atlantic on Friday warned of an exodus of talent from some of the biggest names in US finance, saying the “anti-American” measures smacked of “a McCarthy witch-hunt” that would send the country “back to the stone age”.
The bonuses are unpalatable and Adam commented on one aspect in his post ‘ The outrage-o-meter’ and another again in ‘Change you can believe in. Yeah, Right‘
The actions being proposed are likely to be counter productive. Not only will they penalize, perhaps, some who contributed to the mess the global economy is in. they will penalize as well others who did no wrong. In addition to issues such as passing legislation with retrospective effect to target one group; this law raises other issues.
Governments which start down this slippery slope often find it easier and easier to pass other morally dubious law. Bright people start to shirk the sectors targeted. What will happen if the talent leaves. Will the US pass laws to force the talent back. That would be a really good look given the past history of slavery in the US.
The US risks becoming like Venezuela with Obama as the US clone of Hugo Chavez.
The article notes as well:-
Some policymakers expressed concern that banks may try to break out of the government’s embrace by paying back public capital even if the price is a more severe credit squeeze.
They also fear that financial institutions may decide not to take part in public-private partnerships to finance credit markets and acquire toxic assets.
So for the sake of a few million dollars and political vindictiveness and playing to the gallery of American public opinion, the global economy is put at risk. Where is Obama in all this? No doubt out having a town hall meeting rather than leading or governing. Perhaps a group of community organizers can save the economy.
Of course the competitors of US banks are chortling:-
Bankers at Deutsche Bank said it could benefit from the proposed legislation by poaching its US rivals’ most talented employees.
On our own doorstep we have Comrades Kevin and Wayne musing on salary restrictions.
The Obama Administration does not appear to govern or even attempt to steer the legislature. Pelosi and her cohorts have far too much sway.
What we have here is Obama in Blunderland.
It should be remembered that any attempt to legislate against individuals or a small class of people may well run into serious constitutional issues. Obama does not need a long Supreme Court case on this matter either. Epic Fail comes more and more to mind about this president.
Sorry just read further down. It appears that they did omit (deliberately or accidentally) to qualify the bonuses in the bailout agreement which makes it very very scary.
I was always dubious about Obama. Looks like our worst fears about the man are coming to fruition
One has to ask just what the criteria was for the payment of these bonuses. It seems to me that they were not bonuses in the true sense of the word (ie linked to the performance of the organisation) but just a way of repackaging the straight salary.
If they were performance based then surely those negotiating the loans from the government to the organisation would have added a clause that no performance based payments were to be made. If they didnt then that is just scary. If they couldnt even get that right what hope is there that they will be able to control an economy the size of America.