Unbelievable!

I’ve been shocked and awed like nearly everyone else by the responses to President Obama’s newly announced demand that top execs of bailed-out institutions limit their salaries to $500,000 per year. I’m amazed at the depths of the states of denial these execs (and their allies in the media) have no problem telling us they are in.

Here’s an example. Charlie Gasparino of the Daily Beast website writes about a CEO hired to cut jobs and costs last year:

“In early 2008, just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm…. According to documents reviewed by The Daily Beast, Thain spent $1.22 million of company money to refurbish his office at Merrill Lynch headquarters in lower Manhattan. The biggest piece of the spending spree: $800,000 to hire famed celebrity designer Michael Smith, who is currently redesigning the White House for the Obama family for just $100,000.

 

The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a ‘mahogany pedestal table’ for $25,000; a ‘19th Century Credenza’ in Thain's office for $68,000; a sofa for $15,000; four pairs of curtains for $28,000; a pair of guest chairs for $87,000; a ‘George IV Desk’ for $18,000; six wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a ‘Roman Shade’ for $11,000; a ‘custom coffee tabl’" for $16,000; something called a ‘commode on legs’ for $35,000; a ‘Regency Chairs’ for $24,000; ‘40 yards of fabric for wall panels,’ for $5,000 and a ‘parchment waste can’ for $1,400….”

Remember, he was hired to cut jobs and costs!  And even after the you-know-what hit the fan this exec had to be forced to cancel a trip to the Davos, Switzerland gabfest last week. Unbelieveable.

A recurring theme among the execs and their allies has been “if you limit their pay, the will take their talent to other companies, and things will only get worse for the bailed-out ones”. Is that the sorriest blackmail, or is it just me? The guys (yes, the glass ceiling may have kept women out of this class) who wrecked our 401-k’s and the economy are actually saying , “Give me the bailout and my bonuses or else I’ll walk away from this wreckage I helped make and leave you with ‘lesser talent’ to figure it out!” .

Sadly, we may not have much of a choice but to give in to the strongarming, but there may be a positive in this mess to consider. If the Thains of Wall Street are going to walk out on a half-million-dollar salary, maybe some hidden talent – minorities or women – will fill in the void and bring a much-needed fresher approach to the street. The current class of entitled execs seems determined to pretend the economic bubble we had burst in our faces didn’t include compensation packages that were also bubbles in their own right. If the strong economy that made them rich was a mirage, shouldn’t their out-of-this-world payoffs be mirages, too?