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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