Worried about a potential slippery slope with the Obama administration dictating what people are paid in the private sector - TARP bailout or no TARP bailout? Message from CNBC's Jim Cramer: Get over it.
On CNBC's Oct. 21 "Street Signs," the "Mad Money" host ripped into Wall Street executives that objected to the government dictating the rules of compensation. Opponents argue these pay restrictions inhibit Wall Street firms ability to retain the best employees possible - an argument Cramer says doesn't matter.
"Hey, there's no God-given right to work at those companies," Cramer said. "These people can go off if they want to. I know that [Citigroup Inc. Chief Executive] Vikram Pandit has kept 23 of the top 25 people with very severe pay restrictions. If you believe in your institution, you stay. See, a lot of Americans are looking at those pay cuts and thinking, ‘How do I get in on the action?' So I don't really care."
The "Mad Money" host argued it wasn't just a "populist phenomenon," which suggests it's a political movement meant to capitalize on the current mood of the country.
"I want to emphasize - this is not a populist phenomenon," Cramer said. "In other words, we're paying these people's salaries so let's get serious about it. I totally agree we need more pressure on these companies to raise capital to get the government off their back. If they can't raise capital to get the government off their back, then what's the matter with having a lot of young hungry people go work there?"
He did admit there were some cost-of-living issues that made it necessary in New York City, where Wall Street is located, to compensate at a higher amount, but he says they should have saved for a rainy day.
"Now, in New York City, it does cost a lot of money to live," Cramer said. "It's absolutely true. It's really difficult to make it on money that sounds absurd to people if they live in North Dakota. But I have to tell you - I say, ‘You know what guys, you made millions of dollars from 2000 to 2008. What the heck did you do with it, that you can't live off it now? Didn't you buy any munis [municipal bonds]? What you - did you let it run?'"
And if you didn't save, if you spent he says "just too darn bad" if you reject the government's push to limit pay.
"Hey listen, I was in for the ride," Cramer said. "I know what it was like. You either saved and you could live off that for a long, long time or you spent and you're working there, well you know what - you got to go somewhere else and that's too bad. It's just too darn bad."
"Street Signs" host Erin Burnett asked Cramer if this could have an effect on other Wall Street firms not in the purview of the federal government, but instead were afraid of the bad PR they could receive for objecting. And although one could argue it was none of Jim Cramer's damn business what these employees may have done with their pay in the past, he said they should have invested in New York State municipal bonds.
"I mean, look again - I harp back to the same untold stories," Cramer said. "It's a story from New York magazine I mentioned from awhile ago, which is if you worked at these places, you made millions. If you invested the millions correctly, which is typically New York State municipal bonds, then you have no problem living off this. People ought to recognize that this is what this is about. You have savings. These people can live off their savings. It's never talked about. It's the untold story. It's like these people were paid $10 million in 2005 and unless they put it in the incinerator, they can live off that. So I don't feel any sympathy for these people."
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Gee I wonder....
Wed, 10/21/2009 - 18:22 ET by superconwhat big shot T.V. hosts make....? I'm sure there are plenty of people willing to do his job for less too.
" if Republicans are able to stop Barack Obama on health care, 'it will be his Waterloo, it will break him...." -Sen. Jim DeMint
STOCK MANIPULATOR
Wed, 10/21/2009 - 22:38 ET by ptsonJim admitted on his show that Hedge fund managers manipulate stock prices, AS HE DID. He made millions of dollars and now is sucking up so hard to his liberal buddies, that his head is going to explode. Sorry your buddy SPITZER is no longer Govenor but he SHOULD HAVE COME AFTER YOU! He probably would have, if he could have gotten some headlines and you wern't violating the law for his benefit. Now you justify taking the private property and liberty of others. YOU are a scum sucking pimp! YOU SHOULD BE PROSECUTED AND YOUR MONEY CONFISCATED!
This Cramer guy seems
Wed, 10/21/2009 - 18:32 ET by MightyMouthThis Cramer guy seems slightly smarter than Homer Simpson (but not Bart) and a damn close look-alike, I might add..
But really... who listens to this crap (except our fearless NB bloggers) and gets anything usable from a glorified underware model and Homer Simpson? I think I actually lost IQ points watching that exchange...
"The bureaucracy is growing to meet the needs of the growing bureaucracy"
He is a Homer
Wed, 10/21/2009 - 18:36 ET by general companyEver since he was B!tch slapped by Jon whats his face.
My Gov. thinks I am dangerous, so be careful
"Television is a freak show" Bernie Goldberg
And if you didn't save, if
Wed, 10/21/2009 - 18:39 ET by bigtimerAnd if you didn't save, if you spent he says "just too darn bad" if you reject the government's push to limit pay.
Hey Jim...buy a clue...we need to apply that to the govt. first and foremost...don't you think.
Sheesh...we wouldn't have been in any of this mess in the first place if it wasn't for the govt./congress-critters over the years...and years...and years... in oh so many ways.
'Doubling down on stupid is not a particularly good idea'~Breitbart
What about hollywood?
Wed, 10/21/2009 - 18:42 ET by SlyrrYeesh, what will they say when the govt. starts looking at movie (and news) celebrities? 'You know, you're earning too much. Time to cut YOUR pay by 90%....'
Will they still be cheering? I bet they're hoping Obama will exampt them, since they're his loyal media slaves....
Until Hollywood receives
Wed, 10/21/2009 - 18:50 ET by Another Dead KennedyUntil Hollywood receives government bailout money to save the industry, it's not comparable.
xoxo - Ted
When they came for....
Wed, 10/21/2009 - 19:03 ET by SlyrrWhen they came for the coroporate executives, I didn't trouble, because I wasn't a corporate executive.
When they came for the bailout takers, I didn't trouble, because I wasn't one of them.
By the time they DID come for me, there was no one left to defend me...
Didn't NB just have a story
Wed, 10/21/2009 - 21:10 ET by Wall WatcherDidn't NB just have a story about TV shows getting money to insert pro O messages into shows? Didn"t artist recieve tax dollars to push pro O artwork? So we finance it we can regulate it, correct.
Did NB just have those
Thu, 10/22/2009 - 10:06 ET by Another Dead KennedyDid NB just have those stories? I don't know. Please provide if you will.
xoxo - Ted
The website Big
Thu, 10/22/2009 - 10:22 ET by Scuba DudeThe website Big Government (another Breitbart site) had a series about the White House pushing it's policy through the NEA. Could this be what you are thinking about?
The Obama Administration: THE most fiscally irresponsible Administration EVER
U.S. Constitution as two ply T.P.
Wed, 10/21/2009 - 18:43 ET by SouthernRootsThey may not deserve their salaries, but what section, exactly, in the Constitution allows the executive or the legislative branch to dictate, ex post facto, the compensation rates of some people in private businesses?
What section, exactly, in the Constitution allows the executive or the legislative branch to unilaterally void contracts and replace them with whatever the political whim of the moment is?
Pro athletes make a lot of money and the taxpayers pay a lot of taxes for their place of work - the stadiums. Should congress or state governments be allowed to dictate the terms of the contracts because of the taxpayer dollars involved?
How much of an involvement of taxpayer money would qualify for a federal takeover of any private business?
Where does to governmental power end?
I won't be wronged. I won't be insulted. I won't be laid a-hand on. I don't do these things to other people, and I require the same from them. - J.B. Books (John Wayne)
SR... In answer to your
Wed, 10/21/2009 - 18:47 ET by bigtimerSR...
In answer to your question all I can do is hope by this time next year people have awakened...all across this land and vote!
Otherwise ACORN and sister groups will have done enough damage with their cheating schemes that we will be saddled with this mess for another two years...we have to gain some power to stop this break-neck speed madness.
'Doubling down on stupid is not a particularly good idea'~Breitbart
Well you do realize cutting
Wed, 10/21/2009 - 19:48 ET by dscottWell you do realize cutting someone's salary by 90% is going to come back to haunt them. First let's start with the question, why should traders who have been jerked around by the Obama Admin. sell any US government bonds? Why should they do any trades that might help Fannie Mae and Freddie Mac?
But let's cut to the chase here, if you cut somebody's salary 90% of say $500k a year, that means they only take home $50k, HEY YOU DUFUSes at the Treasury, YEAH YOU MORONS. Answer this question, how much money did the IRS not take in income taxes as a result of your grandstanding moral self righteousness? Honestly, you Democrats are truly a stupid lot.
So the price of riding on your moral high horses you denied the Treasury upwards of $110k per person. Way to go Democrats! Keep going like this and Obama will be running $2 trillion deficits every year. What part of the top 5% of wage earners pay 60% of the income taxes did you NOT UNDERSTAND? Spare everyone your moral self righteous, it's rather expensive.
Nancy Pelosi and Harry Reid, starving the poor one gallon of ethanol at a time. Fill your tank with E85 and cull a village.
Honestly, you Democrats are truly a stupid lot
Wed, 10/21/2009 - 20:12 ET by R D HelmDan, I agree, but they are more interested in "punishing the wealthy" than actually increasing government revenue.
They don't care if these companies go under, as that plays right into what the left and Obama is really up to:
Destroying our nation's free market economy.
-Dave
Our elected representatives have failed us.
Not about punishing the wealthy...
Wed, 10/21/2009 - 21:04 ET by David N MOIt's about controlling the populace. And you start with those who have the most individual control and that is the wealthy.
As Rush reminded me good ol' Carter put wage and price controls in place... and they don't work.
When a restraunt couldn't raise the price of a Kansas City Strip steak, they might start cutting it with curvy lines and call it a Texas Wiggle steak at twice the price... And the general manager's position became CEO at twice the salary.
If I were CEO of Bank of America I'd quit and start a new business with the millions I'd saved up. That'd learn 'em.
David
Take the goverment's money,
Wed, 10/21/2009 - 19:58 ET by celatorTake the goverment's money, and you dance to their tune. Simple as that.
No citizen's right to life, liberty, pursuit of happiness, or property is safe as long as Obama is President of the United States.
I couldn't agree more
Thu, 10/22/2009 - 03:01 ET by DaMavpoint made
First it's auto companies.
Wed, 10/21/2009 - 19:59 ET by TenebrousFirst it's auto companies. Then it's Wall Street. Who's next to have their income limited by the federal government? Come on, everyone sign up now! Obama knows what's best for you, now. Come drink the Kool-Aid. /sarc
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Random-jumbled-thoughts.blogspot.com
cramer
Wed, 10/21/2009 - 20:28 ET by BRADENdoes this mean since GE took tarp money that the salaries at MSNBC NBC CNBC should be looked at and decreased for those making too much money. ie Keith Olbermann, Jeff Imelt, Chrisie Matthews, or are they exempt as the tow the party line.
These people are not really capitalists
Thu, 10/22/2009 - 02:59 ET by DaMavI'm definitely not a Cramer fan, or an Obama fan, but when these companies accepted government bailouts they became socialist lackeys. I have no problem with a private going concern paying millions to key executive personnel. But if my taxes are going to bail out a company because of choices they made in the market, I'd be ok if they capped their salary at minimum wage. Next time run your companies better or don't take the bailout, chumps. If the government was forcing you onto a suicide path, change your business model or leave. Don't suck rent induced profits and then come crying when you hit the wall.
Firms that can't compete are supposed to go out of business, not be bailed out by the government. We are turning into a nation of whining crony capitalists where the profit maximizing strategy is lobbying for rents. It's nice to see them get burned for a change.
Cramer had one good point. If they don't like the deal, leave and go somewhere else. Stop crying on our shoulders and demanding a government handout. And please don't tell me the world will come to an end without your company. Again, bankruptcy and rebirth is at the core of the system that got our society this standard of living. Tough when times are tough, but then the reward is an efficient market driven economy, and that's the best reward of all.
Under what law
Thu, 10/22/2009 - 04:14 ET by Dragonsbreathare they allowed to force any company to do this? Unless it is stated in the legal contract then it should have to say so right?
Any legal minds here know the answer to this?
"1/20/2013 The end of a Error"
Here's an example of a TARP Waiver
Thu, 10/22/2009 - 04:35 ET by DaMavI'm not a lawyer. My understanding is that the reduction in pay covers only firms receiving bailout funds. It's an open question as to how evenly it is being applied. Just as it was an open question as to how exactly they decided to award what monies to whom.
FORM OF WAIVER
In consideration for the benefits I will receive as a result of my employer’s participation
in the United States Department of the Treasury’s TARP Capital Purchase Program, I
hereby voluntarily waive any claim against the United States or any state or territory
thereof or my employer or any of its directors, officers, employees and agents for any
changes to my compensation or benefits that are required in order to comply with Section
111 of the Emergency Economic Stabilization Act of 2008, as amended (“EESA”), and
rules, regulations, guidance or other requirements issued thereunder (collectively, the
“EESA Restrictions”).
I acknowledge that the EESA Restrictions may require modification of the employment,
compensation, bonus, incentive, severance, retention and other benefit plans,
arrangements, policies and agreements (including so-called “golden parachute”
agreements), whether or not in writing, that I have with my employer or in which I
participate as they relate to the period the United States holds any equity or debt
securities of my employer acquired through the TARP Capital Purchase Program and I
hereby consent to all such modifications. I further acknowledge and agree that if my
employer notifies me in writing that I have received payments in violation of the EESA
Restrictions, I shall repay the aggregate amount of such payments to my employer no
later than fifteen business days following my receipt of such notice.
This waiver includes all claims I may have under the laws of the United States or any
other jurisdiction related to the requirements imposed by the EESA Restrictions
(including without limitation, any claim for any compensation or other payments or
benefits I would otherwise receive absent the EESA Restrictions, any challenge to the
process by which the EESA Restrictions were adopted and any tort or constitutional
claim about the effect of the foregoing on my employment relationship) and I hereby
agree that I will not at any time initiate, or cause or permit to be initiated on my behalf,
any such claim against the United States, my employer or its directors, officers,
employees or agents in or before any local, state, federal or other agency, court or body.
In witness whereof, I execute this waiver on my own behalf, thereby communicating my
acceptance and acknowledgement to the provisions herein.
Respectfully,
____________________________
Name:
Title:
Date:
This is just an example of a contract listed on the Treasury's site. I look forward to seeing a better answer to your question.
http://www.financialstability.gov/docs/CPP/09152009/Blackridge%20Financial,%20Inc..pdf
very ironic
Thu, 10/22/2009 - 08:20 ET by jon_torlinI find it very ironic that this is happening. Not surprising, but therein lies the story. Did anyone actually think this pay-cut to the bailed out companies were not going to happen? I was certainly expecting it, especially when they announced the "Pay Czar" and I think a good number of us on here did as well.
So the CEOs who set it in motion to get the bailouts for their companies, did they have a clue that this was going to happen? Or did they make an assumption and figure "oh, we'll be ok, they won't cut us out of anything." If not, SURPRISE! Thank you for playing, we are going to change the game now!
Either way, damn fools all.
-Jon
Pay czar
Thu, 10/22/2009 - 08:36 ET by CO2MakerRhymes with razor and taser.
Also maser and laser (for the word geeks out there). And blazer and phaser.
(Stop me! The caffeine just kicked in.)
I have worked on Wall
Thu, 10/22/2009 - 08:30 ET by Scuba DudeI have worked on Wall Street for over 25 years, not in the Front Office but in back office operations so my compensation is no where near that of the higher ups. That being said, if a company took TARP funds the government does have a say in the compensation until that company repays what they took. But a 90% cut, especially in NYC is ridiculous. Now, if the government sticks it's nose into a company that did not take TARP funds they should STFU about the compensation that company pays it's employee's. It is NONE of their business. What Cramer said about Citigroup retaining 23 of 25 execs with severe pay restrictions is kinda lame. Ever think that they are staying because there are no JOBS out there at the moment? Employment on Wall Street is down at the moment with the Lehman bankruptcy and the mergers of Bear with JPM Chase and Merrill with BOA. When there is a merge there are layoffs. There are also a myriad of layoffs at other firms that have not helped. Also, could these 23 be hanging on for things to get better and they will be in a position to benefit from it? That is my 2 cents.
p.s. Whoever called Erin Burnett a glorified underwear model, thems fightin words : ), though of course she can model for me anytime. Sorry Unsane, I will be working that much closer to her next week. HA HA HA
The Obama Administration: THE most fiscally irresponsible Administration EVER
And NO ONE is asking the right question...
Thu, 10/22/2009 - 08:43 ET by c5thenWhere in the Constitution does it allow the federal government to set, restrict, reduce, etc. the compensations of executives at individual companies???!!!
It matters not what waiver or agreement was signed by the parties. If one party does not have the authority to do what the agreement says, then the agreement / contract is void.
Nobody is asking, in all this power grabbing, money printing, deficit spending frenzy that is occuring, whether the federal government even has the delegated authority to do what they are doing. Where are the journalists? Where are the watchdogs? Where is the opposition? The GOP is not worried about IF the government can or should do any of this, it is worried about the specific details of how it's being done.
The Republic, which our founders gave us at great cost and danger to themselves and their families and was paid for with the blood of our countrymen, is being stolen right from under our noses by our very own elected representatives. Unless and until the electorate wakes up, this will not stop and it will now be a battle just as great as the original war of independance to reverse.
Throw 'da bums out!!!
no incumbent re-elected, with very few exceptions!
www.loyaltoliberty.com
you're correct
Thu, 10/22/2009 - 09:09 ET by jon_torlinYou're absolutely correct about that, in fact, now that I think about it, why hasn't the US Supreme Court declared anything that's been done as unconstitutional with regards to TARP and other actions that have taken place? Why hasn't anything been brought to them?
I'm probably going to regret asking.
-Jon
This is when it gets scary
Thu, 10/22/2009 - 09:01 ET by CO2MakerFrom a Fox News story just moving on their site: "White House pay czar Kenneth Feinberg was the driving force behind the move to order steep pay cuts from bailed-out executives, and did not even seek the president's approval before making his decision."
Pay Czar Feinberg, Not Obama, Behind Decision to Slash Executive Pay - Political News - FOXNews.com
Think about that, boyz and grrls: A regulatory administrator imposes a severe penalty on private businesses on his own (although he already had the authority to do so). Read paragraph 4 in the story.
This isn't a pay cut.
Thu, 10/22/2009 - 10:29 ET by humanzeeThis isn't a pay cut. Obama is firing them. None of these guys are going to stay and swallow a 90 percent pay cut. These guys weren't playing ball with Obama and now he is making an example out of them. It's forced retirement.
And don't tell me he wouldn't like to see GM and Chrysler run like Amtrak or the Postal Service, where the first priority is not a profit but keeping unions in existence.
Will they bail?
Thu, 10/22/2009 - 10:33 ET by slickwillie2001Even in an economy like this, there's always a better job for a top executive with a good record. The downside for them is that the Bamster is enough of a fascist tyrant that he would go after any executive that leaves and force a modification of their employment contract which would include pension and severance details. Some in Congress would also haul them in front of a Congressional preening to berate and insult them further. A top executive has to think about that black mark (can I say that?) on their career. To some extent they are therefore captives.
It's foolish to do this if your objective is the recovery of the economy, the repayment of TARP, and the resuscitation of the financial sector, but it's not clear to me that recovery is the Bamster's objective. This is also a play to the populist idiots like BOR and his constituency.
Paterson to Obama: "Thank your pay czar-meister...
Thu, 10/22/2009 - 14:24 ET by CO2Maker... for the $1 billion hit to state revenues."
Hot Air » Blog Archive » Paterson to Obama: You just cost NY a billion dollars, champ