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Obama Caves On Bank Pay

The Obama administration is bypassing some of the restrictions enacted by Congress to control the pay of individuals employed by institutions that receive federal assistance. The Washington Post reports that:

"The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials."

As readers may recall, this is the same Obama administration that demagogued the Wall Street bonus issue and stoked populist rage about AIG bonuses that it had in fact known about long before they were disclosed by the legacy media. So how is the Obama administration going to circumvent Congress on the pay issue? Here is the plan:

"The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials."

"....In one program, designed to restart small-business lending, President Obama's officials are planning to set up a middleman called a special-purpose vehicle -- a term made notorious during the Enron scandal -- or another type of entity to evade the congressional mandates, sources familiar with the matter said."

As Post reporters Amit R. Paley and David Cho note, the term "special entity" or "special purpose vehicle" should set off alarm bells in any honest assessment of the Obama strategy on this matter. A more cynical interpretation of the President's approach would use the word "fence" in place of the euphemistic vernacular of special purpose vehicle or special entity.

The abovementioned fencing scam puts the lie to the President's comments to the head of the nation's largest financial institutions in a meeting they had last week at the White House. At that meeting President Obama told the banks:

"My administration is the only thing between you and the pitchforks," the president told them.

The president's actions (pay no attention to his rhetoric) make it manifestly clear that the pitchforks are not aimed at the bankers but rather at the taxpayer. The issue in this incidence of Executive prevarication is not whether bankers deserve the higher pay. The issue is that the president is lying about his agenda because he knows Treasury Secretary Geithner's ridiculous bank bailout schemes require a buy in from the banks. The President and his Treasury Secretary are totally owned by the banks in this dishonest plan. Were a Republican President to attempt such a brazenly dishonest strategy there would be calls of impeachment for thwarting the will of Congress. Unfortunately, Congress is in on this ruse and hoping that Americans will pay no attention to the details of the crime.

Update:

Even The Huffington Post is upset about the Obama dishonesty on this. Liberal blogger Ian Welsh comments:

I thought it wasn't the executive's job to decide that Congress is wrong and then deliberately end-run it. I thought we had an election to stop this sort of thing.

This is one of the things we spent the last 8 years blasting Bush for doing. But in this particular case, the new administration is being less compliant with Congress's will than the Bush administration was!

...I don't know whether to spit or cry. I've always had my doubts about Obama, but in my worst dreams I didn't think he'd try and end run Congress even more blatantly than Bush...

Good to see some on the other side have decided to wake up and smell the coffee.....

Update Two:

More gnashing of teeth on the Left.



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Comments (10)

So... putting money through... (Below threshold)
_Mike_:

So... putting money through a process to remove something 'attached' to it - I'd figure a Chicago politician should be a familiar with the term 'laundering'.

If Barack Obama's other ori... (Below threshold)

If Barack Obama's other orifice could speak, what would he say?(parody) BHO Taileprompter

Well, I guess reality beati... (Below threshold)
Gmac:

Well, I guess reality beating a Huffpo poster over the head with a clue by four must have finally awakened him to a reality that the real world has been watching for the last 3 months.

It's really too bad the pre... (Below threshold)
James H:

It's really too bad the president doesn't have the power to veto bad laws, isn't it?

Huffpo people better get us... (Below threshold)
GarandFan:

Huffpo people better get used to disappointment. Having gone thru denial, isn't anger the next step?

"Im upset about the Obam... (Below threshold)
914:

"Im upset about the Obama dishonesty on this"

You voted for this Ian Welsh!....Questioning his highness's honesty and motives are forbidden to minions.

And thus is the reality of ... (Below threshold)
Clay:

And thus is the reality of life under Obama. We need to stop wondering when the market will find its bottom. The federal government has already done an incalculable amount of damage to the American financial sector, and the body blows keep landing. Think of it: Besides the unpredictable "sometimes we seize you, sometimes we take billions of bad assets off your books, sometimes we let you fail" strategy with respect to major financial institutions, the government has also done childish things such as ban short-selling of financial stocks. No one knows what the rules will be next week in these markets. Only a fool would expose new capital to the American financial sector at this point. The only rational thing to do is explore other regions in which to set up shop -- and 'other regions' are outside the bounds of the capricious U.S. What do you expect us business owners to do? Other countries are filling the vacuum by attracting companies that are currently being pummeled by this current adinistration. The present government wants businesses to be just healthy enough to suck us dry again. One of the big considerations we gave to operating in China a few years ago was whether we could to trust the Chinese to keep their hands off our business. How ironic, huh?

The recent tussle over AIG bonus payments shows us a glimpse of our lives for the long haul. In particular, Senator Charles Schumer's comments -- and the proposed legislation to back them up -- empirically demostrates that propety rights no longer exist in this country:

"My colleagues and I are sending a letter to [AIG CEO] Mr. Liddy informing him that he can go right ahead and tell these employees that are scheduled to get bonuses that they should voluntarily return them, because if they don't, we plan to virtually tax all of it. He should tell these employees if they don't give the money back, we'll put in place a new law, that will allow us to [tax] these bonuses at a very high rate, so that it's returned to its rightful owners, the taxpayers. So for those of you who are getting these bonuses, be forewarned: You will not be getting to keep them."

The government is going to keep making this worse. As a business owner, it won't be enough to step back and say, "Well, the feds have already partially nationalized the entire banking system, and brought politics into all major business decisions (including how executives choose to travel to business meetings). What are the effects?" Instead, we need to realize that as things continue to slide(and they will) the Obama administration will continue its trips back to the well. "The first stimulus wasn't sufficient. We need to print up another trillion. That'll do the trick. We're certain of it this time."

The American people need to prepare themselves for the inevitabilty of decreased job opportunities as businesses flee the commissars and the results of inflating the currency are realized. Maybe start growing vegetables in your backyard? Pray that our leaders in Washington suddenly find religion -- the free-market kind -- and this terrible outcome is avoided. But, I'd advise against holding your breath. So far, they think they've discovered a good thing. Power is intoxicating and conceals the consequences of the next morning.

In the meantime, this evil business owner will be sending postcards from Malaysia.

And in other developments, ... (Below threshold)
Clay:

And in other developments, it appears that the survival mode is kicking in at the NYT:

"The New York Times Co. has threatened to shut the Boston Globe unless the newspaper's unions swiftly agree to $20 million in concessions, union leaders said."

With just a little research, I'm certain one could determine the Grey Lady's sympathies regarding the UAW vs GM. It's amazing how quickly businesses become free-market savvy when they're threatened with extinction.

More of that to come.

clay - "In the meantime... (Below threshold)
marc:

clay - "In the meantime, this evil business owner will be sending postcards from Malaysia."

I'm about 8 steps [years] ahead of ya. With the exception of military retirement pay all my income is derived from my P.I. home base and so far buried from obama's prying eyes as to be compared to pelosi's ethics, that is to say - nonexistent.

If there is one thing that ... (Below threshold)

If there is one thing that Obama does and does well it is to tell people what they want to hear. I completely dislike the man and sometimes I find myself actually believing what he says. I think hit myself over the head with a hammer and come to my senses. Always be careful of the source. Especially if its BO Obama




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