Tuesday, March 31, 2009

This Goes Too Far

This is just not cool.

"Beyond AIG: A Bill to let Big Government Set Your Salary"

It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill's language. That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.

In addition, the bill gives Geithner the authority to decide what pay is "unreasonable" or "excessive." And it directs the Treasury Department to come up with a method to evaluate "the performance of the individual executive or employee to whom the payment relates."

The bill passed the Financial Services Committee last week, 38 to 22, on a nearly party-line vote. (All Democrats voted for it, and all Republicans, with the exception of Reps. Ed Royce of California and Walter Jones of North Carolina, voted against it.)

Three words come to mind when I hear this...


Friday, March 13, 2009

You Knew It Was Coming Eventually

All of that money for the bail-out had to come from somewhere...

China "worried" about US Treasury Holdings

$2 TRILLION in U.S. debt to China. They have a reason to be worried. If something were to happen and the US defaulted on those loans, there would be at least 2 crippled countries.

Thursday, March 12, 2009


The Obama team is going to make retired veterans use private insurance to pay for service related injuries.

WASHINGTON (CNN) -- Veterans Affairs Secretary Eric Shinseki confirmed Tuesday that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance.
But the proposal would be "dead on arrival" if it's sent to Congress, Sen. Patty Murray, D-Washington, said.

...Currently, veterans' private insurance is charged only when they receive health care from the VA for medical issues that are not related to service injuries, like getting the flu.

In the words of Hot Air...
"Most politically tone-deaf proposal ever."

Saturday, March 7, 2009

Going Galt?

In the book Atlas Shrugged, executives, and other leaders and innovators are becoming harder to find. They are objecting to the government's move towards socialism and statism, and to protest are no longer helping to pay for the government.

In the book, as these people leave employment and the government's revenue drops, the society begins to collapse.

Something like that is not too far off.

New York City has almost 9 million citizens, and according to Mayor Mike Bloomberg, 40,000 of those residents pay 50% of the total taxes the city takes in. This isn't only income taxes, but this is also sales taxes, property taxes, and corporate taxes. The thing people forget when they hear this "40,000 people pay 50% of taxes" is that chances are, the CEO's not only pay a ton in income taxes, but they also likely live in the city in a purchased condo/penthouse that they have to pay property taxes on. They also probably own the building that their business is in, and have to pay property taxes on that. Then they have to pay any form of corporate taxes and such to the city.

So yes, 40,000 people CAN and DO pay 50% of NYC taxes.

And if you don't think that those people might be looking to move to, say, Florida, just look at California. Start Thinking Right has a great piece on the subject and quotes the California Business Roundtable's findings;
1. The cost of doing business in California is 30 percent higher than the western-state average.

2. Almost 40 percent of the California decision-makers participating in the Roundtable survey plan to “outsource” jobs from California to other western states, preferably Texas.

3. Half of the companies have “explicit policies to halt employment growth in California while less than five percent of companies have retention policies in place to keep jobs in California.”

4. Last, California’s “regulatory environment is the most costly, complex and uncertain in the nation.” Regulatory costs are 105 percent higher in California than in other western states.

Outsourcing from one country to another is as legitimate as outsourcing from one state to another. It’s a principle from Econ 101. And, it works: Just monitor California.

Or, people could just use their wealth and stop working. I know if I were that wealthy, I could find something to occupy my time.