At his blog Politics Is a Blood Sport, Aneurin notices an idea put forth by locally well known Camas investor David Nierenberg, whose investing skills are frequently covered by Motley Fool, which last month referred to him as a “master small cap investor.” Aneurin excerpts comments Nierenberg made to The Oregonian in a Sept. 23 article:
David Nierenberg, a Camas, Wash., investor, went further, calling for “clawbacks” that would allow the government to recover compensation paid to former executives and directors who were in charge when companies moved into subprime mortgages and other high-risk securities that put them in harm’s way.
“It’s harsh, it’s blunt, it’s bloody,” Nierenberg said. “But that’s the way it should be.”
Nierenberg also urged the government to take equity positions in the companies receiving federal aid, as it did when it bailed out Chrysler in 1979. The government ended up making money on its investment in Chrysler.
“If the government is going to put all this money of ours at risk, it should get equity, warrants and options to get repaid first,” he said.
Aneurin goes on to write:
The notion of “clawbacks”, where CEO’s give up their golden parachutes, is exactly what’s needed to sway detractors of the bailout plan. No one wants to hear about CEOs making $20 million for 17 days worth of work. In order to sell this thing politically, taxpayers need to know that they’re not the only ones taking it in the shorts.
What doesn’t seem to be happening with the bailout is serious consultation with business and economic realists. While Nierenberg was a supporter of Mitt Romney and now John McCain, and once worked for Romney, Nierenberg is quite the heavy hitter in state political circles, contributing large sums to candidates and committees of both parties. He also serves on the Governor’s Economic Council and the Washington State Investment Board.
So if a tough-as-nails, realistic capitalist like Nierenberg thinks “clawbacks” are a good idea, then why isn’t that part of the discussion? The people know they’re getting ripped off big-time, and there’s no reason that executives who ran companies aground should escape with millions of golden parachute dollars.
Full Disclosure: I volunteered on a campaign committee headed by Nierenberg called Evergreen Citizens for Schools from about 1998 or to about 2001, so I know him. I haven’t had the pleasure of speaking with him for about a year, so the point is he’s not pushing his “clawback” idea with me. I just thought it was an interesting idea.
And Marvie is stumping for Hanoi John McSame, the star of so many commie propaganda films.
How’s the goat fucking going for you, Marvie? Have you decided to come out of the closet yet?
And written by Karl Rove.
Tool.
Oh did you see McSame this morning after his speech? He couldn’t figure how to get off of the stage. Looked like he may have had a mild seizure of some sort just prior to his bout of confusion. Mild stroke maybe? He has been pushing it hard lately. I know there is a lot of doctors asking to see his medical records.
The government should get the same terms as Warren Buffet did for Goldman Sachs.
Buffet is first in line in the event G/S goes under.
What’s so hard about that?
Marvie believes anything written by “his party”. Even the ones that contradict each other. Hey, you know we could just posting the daily RNC talking points for him. Just think how much extra time he could spend with his goat.
I am surprised that this is the first time I hears of them in this situation.
Let the people that profited from these scams pay their fair share of the “rescue” costs.
@1/whomever
I used to have a lot of respect for Orin Hatch. Hatch was someone with vastly different views than me, but I could respect him and those views. That’s all gone out the window since the 2004 election. The bullshit letter quoted in comment #1 reinforces view.
This is the first I’ve heard of claw-backs as well, but I like the idea.
I like the idea too.
On a tangent. This is a fun article.
http://www.prospect.org/cs/art.....ve_crackup
@1 “seize total control of our government”
But it’s a good thing when Republicans when do that. Right?
Psst, Marvin fucks goats.
It’s No Big Deal, The Brits Aren’t Worried
“It’s an ill wind that blows nobody any good. The fall of Bank rate on Thursday by another half per cent is an outward and visible sign that the dramatic and precipitous slump of the last three weeks in Wall Street has definitely relieved the pressure on the world’s money markets which the New York situation has been exerting ….
“The slump on the New York Stock Exchange, which has resulted in this great change in the monetary outlook, is one of the spectacular episodes of financial history. A prolonged upward movement … has been built up … on the amazing and unexampled prosperity of America. But some two years ago the speculative movement seemed to lose all touch with reality; and in spite of occasionally vigorous but more often half-hearted, measures by the banking authorities of the United States, speculative fever spread throughout the nation and carried prices, mainly with the aid of borrowed money, to fantastic heights. …
“Highly coloured stories of devastating ruin and of paralysis of economic life must, as always in such cases, be heavily discounted; but it is natural that people should be asking themselves how widespread and of what character will be the economic reactions of this slump. …
“The question presents itself rather in this form: Can a very serious Stock Exchange collapse produce a serious setback to industry when industrial production is for the most part in a healthy and balanced condition? Optimists say that there is no precedent for such a harmful reaction, and that the worst that need be expected is a slight shock reflecting itself in a short-lived hesitation.
“Even though some temporary contraction of demand for consumers’ goods … may be inevitable, it is argued that cheaper money should lead to increased expenditure on capital goods by industrial corporations, and that … should quickly produce a renewal of the upward trend of industry as a whole.
“A more serious view is taken by others, who point not only to the heavy ‘break’ in … commodity prices which has accompanied the slump, but to the danger that Wall Street losses may have gravely shaken the psychological confidence of America …. These observers think that the orgy of speculation in the United States has been so widespread that persons of all classes … have been living beyond their means, or, at all events, mortgaging their future …. It is said that this has resulted in a precarious situation …, and that the slump will lead to widespread defaults and a slowing down of production …. It may … be taken for granted that there will be some curtailment of … consumption …. How far this will extend must at present be a matter of conjecture.
“A great deal must in any case depend upon the situation of the banks. The one influence that could … produce a real depression throughout the country would be banking trouble. … The position of the banks is without doubt the key to the situation …. On the whole, the experts are agreed that there must be some setback, but there is not yet sufficient evidence to prove that it will be long ….
“It remains to consider what effect a setback, whether great or small, in the United States will have upon other countries. … The fear is … expressed that if United States producers suffer from a diminution of their home market, it will … lead to the exporting of the surplus products …. In any case, against any disadvantage arising from American competition must be set the great advantage which we mentioned at the outset, namely, the return to cheap money conditions. This should assist trade … throughout the world, which has been handicapped … by the abnormal financial conditions in New York. If we are justified in assuming that the setback in American industry will only be temporary, we may look forward to steady development in 1930, free from the incubus that has of late been hampering world conditions.”
— The Economist, Nov. 23, 1929 (quoted under fair use)
Here’s a very broad topic.
I listened to a radio guy on 710 over the weekend. He was saying that liberals don’t like people who make a little money. That all CEOs were doing was making a some money.
That raises the question, how much is enough money. Personally, I think the cut off level is $500,000. If you are earning over half a million a year. You and your family should be able to live well on that.
Anything over that is excessive, and should be taxed significantly.
@1 A Republican is living in the 1970s? Well, that’s progress, sort of. Most Republicans are still living in the 1870s.
@9 Clawbacks are well known to the legal profession, and have been for a long time. This isn’t a new idea, or one for which precedent is lacking.
13
And the Muslims hate us because we are free. Yet we imprison without a trial and torture our citizens just like they do.
“Choose your enemies well, for you will become most like them.”
@18 I haven’t had any visitors in my hole.
Why are righties afraid of Ifill? Are they afraid she’ll ask tough questions that might make Palin look stupid, e.g. “what country is Alaska part of?”