It’s not related to the content of this site, but I am so damn mad about the financial bailout, mainly because the folks who profited the most from this mess are getting bailed out. So when I saw this post from Fred, summarizing Tom, I had to pass it along. I agree totally.
Rule #1: Cut salaries now
Part of the bailout bill ought to be that any organization which proffers securities for government purchase must agree not to pay any employee or contactor more than $1 million per year for the next four years. No cheating with trips to events on the corporate jet or other perks with draconian penalties TO THE RECIPIENT for violations.
Rule #2: No new golden parachutes
Some executives have contracts which entitle them to huge golden parachutes – especially if their pay is cut. These need to be annulled.
Rule #3: End payment on old golden parachutes
Payments on existing golden parachutes should be stopped.
Rule #4: No dividends for a year
This seems harsh to us shareholders who may have bank securities in our portfolio, but it’s not. Clearly an organization which is being bailed out needs to conserve cash to survive.
The bailout doesn’t address any of the factors that lead to the need of a bailout. The banks are insolvent.
Before taxpayer money is spent, I would like to see the financial execs frog-marched down Wall Street.
John:
Thanks for the support on this.
Treasury Secretary Paulson has just made clear that, given the broad discretion in the bailout bill he would NOT cap executive salaries. Says too many institutions wouldn’t participate. Tells you something about his opinion of his excolleagues but, more importnat, makes clear that he shouldn’t have these broad powers.
more here http://blog.tomevslin.com/2008/09/capping-executi.html
But what about the Constitution?
I am getting more and more fed up with Wall Street: The financial markets at Wall Street in combination with the global marketplaces have become such an interwoven, giant, monolithic, extremely complex and as recent history shows, extremely fragile marketplace. Often even financial experts lack insight and comprehensive understanding of all the interdependencies, so it is no surprise that a increasing number of private investors are getting more and more at unease with the lack of transparency.
In my opinion we need to go back to basics: Move the money from this macroscopic, behemoth and abusive market back into small businesses on main street. Brick and mortar businesses with nuts and bolts, that are in expansion mode. It is transparent, easy to understand, you see your money at work, and often, your investment will be secured by the assets of the business. In case your money sits in a 401k, don’t think your hands are tied, you can roll it over to a self directed IRA. There are several plan adminstrators out there who allow you to invest into a multitude of assets, way beyond the classic choices of mutual funds.
I’d characterize this back to basics philosophy as Micro Economic Investing.
http://invest4real.biz/financialmarket.html