If you are not scared by what Obama and his unconstitutional pay czar are pulling here you should be. This story misses the forest for the trees. Sure, nobody will shed a tear over the criticism of Wall Street firms who recieved bail outs. BUT, the Fed is looking to regulate compensation for Banks WHO DID NOT GET BAILOUTS!!! If that does not scare the shit out of you then you are a moron.

If they can regulate any bank, they can try and regulate any business or profession. I would say if Obamacare passes Docs will be next.

And why shouldn't they?

It's against our principles to regulate compansation at private companies and sets a bad precedent. If the government really wants to do something about outlandish bonues they can just change the tax structure to make sure more of the money comes back to the government- of course they will then proceed to waste it anyway.

Pseudo-governer Patterson is crying the blues beacus of all the taxes he won't be able to collect on those wall street boys

I don't think salary caps are the right approach, but I'm in full support of the government doing something big. We need to acknowledge that banking is a hugely inefficient market (as evidenced by mad profits created by irrational risktaking).

Companies keep saying "we can't retain top talent without bonuses" but they could find perfectly good people willing to take half the pay, they just collude to keep salaries high and set up economically irrational compensation plans. I'm a believer in the free market, but when an industry is profoundly distorted and flawed, I'm in favor of the government attempting to correct it.

"It's against our principles to regulate compansation at private companies and sets a bad precedent."

No, it isn't. For instance, there are both national and state minimum wage laws which directly regulate compensation by private companies. You may oppose them, but most people don't since they recognize that, among other benefits, it puts a floor under their own wages. Also, there are laws providing for private companies to pay for employee Social Security and Medicare insurance. Again, opponents to this practice are in the minority.

"... they can just change the tax structure to make sure more of the money comes back to the government ..."

All is not lost; I agree with you on this one. I consider it just as unacceptible to pay atheletes, entertainers, and talk show hosts multi-million dollar wages, mostly for having fun. A steeply climbing marginal tax rates at high income levels, terminating with a 100% rate at some point, will make it futile to try to pay people at extremely high levels. I will go further and suggest that "unearned income" should be taxed at the same rates as "earned incomes". It is probably not too hard to make a case for the immorality of awarding people for not working.

It's against our principles to regulate compansation at private companies and sets a bad precedent...

?!?!?!?

Goldman Sachs is a publicly traded corporation, owned by shareholders like you and me. As the article suggests, revenue which could go to dividends or used to drive up our stock's price is instead given to a small cadre of insiders. The corporate managers take all the cream. We never see the profits even though we, the shareholders, are the owners. Doesn't that seem upside down to you?

You, as a shareholder, don't like the way a company structures its dividends or employee pay? Fine, either buy enough of the company or rile up enough shareholder's to sway the board's decisions or don't invest in that company.

If the government is the majority shareholder, they ought to be able to set pay to whatever they want.

If the company didn't accept bailout funds then the government should not care what the company does unless they're breaking the law, of which we have plenty.

PhilfromCalifornia:

I consider it just as unacceptible to pay atheletes, entertainers, and talk show hosts multi-million dollar wages, mostly for having fun.

So who should get that money? Lots of people pay a lot of money over half of the year to see the Dodgers play. Advertisers and broadcasters chip in enormous sums as well. If you think it is unaaceptable for Manny Ramirez to see more than 20 million of those dollars, where does that money go? Do you consider it more appropriate for the McCourt's to pocket it (or their divorce lawyers)? Or should everyone's salary be capped and the government take everything beyond that? Should it be illegal to charge the fans more than what would be sufficient to pay all of the employees the mandated maximum salary?

Spackle, then what you are addressing here is the method of compensation, not the degree. As a shareholder in many financial institutions, I'd like to see the system set up so that clawbacks and lockup periods are incorporated into compensation structure. But I'd like to see this addressed by the board of directors and managment, not by Uncle Sam.

(And if a banker or trader makes real alpha, i.e. creates risk-adjusted value for the bank, I'm certainly in favor of their obscene compensation.)

Fair enough, it should be handled by the Board of Directors. But for whatever reason (and I suspect at least part of it can be determined by looking at the composition), they won't. So the question is (and I do not intend here to imply the answer) whether it's preferable to go without what you describe or to have it brought in from the government? If you had to pick between the two, which would you prefer?

The tax structure I suggested is structured to keep anybody from having a mega-income! I think that, as various folks come to understand that they cannot take more money out of the system just by charging higher prices, they will stop doing that. If they insist on charging those fans more, then we, as the government, will receive more via the taxes. Obviously, we, the government, needs to receive more, at least until the national debt is paid off and a surplus is accumulated to cover any lean years that might come along.

Marxist thinking.

Stifle hard work by giving all to the state.

How about we, the government , needs to spend less.

What, incidentally, is wrong with Marxist thinking? He was a highly respected and influential economist.

How about we, the government, needs to spend more? Or are you enjoying the recession?

PhilfromCalifornia:

All is not lost; I agree with you on this one. I consider it just as unacceptible to pay atheletes, entertainers, and talk show hosts multi-million dollar wages, mostly for having fun.

First of all, I think you fail to appreciate that, for instance, what a professional football player does is not the same as you playing a Saturday afternoon pickup game at the park.

But more important, the distinction you're missing is that those salaries are very closely related to what the public feels it gets back from those people. Michael Jackson made all that money because tens of millions of fans chose to give it to him in return for the pleasure his music brought them. Eli Manning makes it because fans pay (or suffer through ads) to see him play.

The public doesn't have the same input into Wall Street salaries and bonuses - the system that determines what they get and, more important, who gets to decide what they get is Byzantine and deliberately designed to avoid anything as pedestrian as the value they actually give to customers and shareholders from interfering with their God-given right to skim millions off of the "real economy". This is why the government needs to step in - the level of collusion and fraud is absolutely criminal. (Not to mention, the corporation is purely an artificial creation of law, and therefore of government, to begin with.)