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."
