The Einstein of compensation

Can we restructure Congressional pay to be 'in line with performance', too? I think emptying Barney's coffers would be a step towards filling the hole he's helped dig for us.

Hi Russ and commenters,

I'm not quite following the contention here. Is this saying:

"Who is Barney Frank to comment on 'too much pay' when it is clear that he is under no such scrutiny"?

If this is the contention (and I confess that I may be mistaken); perhaps it may be more useful to turn his own techniques of scrutiny on himself. Perhaps a one for one comparison of pay over performance between Frank and a CEO that he has taken aim at?

Just a suggestion. Usually I get a lot of value from these posts. This time around I'm less clear about how the goal is reached. If at all my interpretation of the goal is correct, ofcourse.

"how well they stimulate economic growth;

and how by much the dollar increases in value."

You're playing with fire here.

LOL, Barney Fank, I did, yes I did.

Egg on face.

But, LCJ, does this mean that he isn't an experienced businessman? :->

>>Barney Fank is an experienced businessman<<

Com'on, Vidyohs, why purposefully omit the 'w' from Barney Fwanks's name. I mean, just because the guy looks and talks sort of like Elmer Fudd doesn't mean...

add to the Congressionla standards:

How well they protect the country,

How well they enforce control at the borders,

and limit their staff size to less than 100 people.

I think we need some standards for Congress.

They should be compensated based on how much they reduce the deficit;

how well they stimulate economic growth;

and how by much the dollar increases in value.

I think these are good performance standards.

Thanks methinks, for an excellent response.

What a nightmarish conundrum for all of us this is.

In perusing the website for Frank's 2008 opponent, Earl Sholley, it appears that he would have minimal appeal in Frank's relatively affluent, bien-pensant suburban district. As long as Frank can effectively eliminate any opposition in the Dem. primary, I don't think there is any policy he could pursue that would put him out of favor.

Jeffrey,

The decision to get into certain businesses is top down in these companies. It was Stan O'Neil's decision to make Merrill the 800 pound gorilla of subprime, not some random trader's on the CMO desk. the talented trader, banker, equity analyst had nothing to do with that decision and added value to the firm - just not enough to overcome Stan's bad decisions.

What people who say "where will they go?" or who assume that everyone at the institution is equally responsible for catastrophic failures don't understand is that people who produce ALWAYS have a bid. Like any corporation, there are plenty of talentless hacks who received their promotion by playing politics. If you don't compensate the producers, those talentless hacks are all the company will be left with. The talented people will leave to start their own shops, be lured away by other shops or just retire. This is already happening.

Incidentally, Goldman is chock full of talent. They have very smart guys working for them and there's a reason Goldman creates as many products as it does and why its people have their fingers in every pie. What Goldman is an absolute EXPERT in is nurturing political ties that allow the SEC and the Fed to look the other way as they manipulate the market with impunity, but that's a story for another time....

New rules and the cream of all banks repaying the government. Thanks.

What surprises me is that nobody talks about the 170billion dollar those top investment banks received through AIG from their buddies Hank & Timmy?

Any chance of that money coming back before the 100million dollar pay cheques roll in again?

"The problem is that Barney is incumbently protected by McCain-Feingold - and is in Massachusetts. Drowning a girl isn't enough to cost you an election there, much less some minor crime, like male-prostitution."

Incumbency is so bad that the murderer himself is getting a call from the reaper and hangs on. Ted's beginning to look like "weekend at bernie's", where the dead guy was propped up.

aaaaa

Actually Jeff Edelman...

Word inside Goldman Sachs right now is that everyone is constantly entertaining other offers and management is terrified of key staffers leaving at any moment.

Money laundering is at least as old as piracy -- pick your own dates and pick your own reasons.

What is commonly known about laundering is the process, placement (put it in a government recognized institution), layering (multiple transactions to obfuscate the origin), and integration (with recognized business).

What is not commonly known about money laundering is that moving cash into a business is just as hard as moving cash out of a business.

Congress critters are some of the best money launderers the world has ever seen. They want the cash that other money launderers are trying to rid themselves of.

Who is better than a congressman on the take to pass money laundering legislation while filling their coffers.

Baptists and bootleggers indeed.

"And besides, this country deserves to experience what it votes for."

I wish folks who said this would remember that it isn't just those who voted for it who must suffer it.

Frank almost certainly represents his constituency well. If he were turned out of office, it wouldn't be long until a near-clone replaced him. Democracy will be an important component of any well-functioning political system, so the problem of Constitution-shredding office holders will not go away. That is why the strength of the other components of the constitutional republic like separation of powers and decentralization is vital. It is the slow (or rather punctuated) erosion of those institutions that is the real problem.

And the second paragraph, warning of a "flight of talent".

AIG and Goldman and Bear Stearns are absolutely chock full o'talent. Can't lose any of those indispensible nations.

I can hardly believe my eyes when I read something like the first sentence in the article, which highlights how compensation schemes encouraged "disastrous" risk taking.

Disastrous? DISASTROUS? The friggin' Obama administration bailed them out, thus RELIEVING and REWARDING them for those decisions.

Why doesn't any reporter understand that?

Larry, there are always rich people since "rich" is a relative term. If the average person survives on $1/day, the guy surviving on $1.50 is "rich" by comparison. In the Soviet Union, if your family had an apartment at which most American welfare recipients would turn their nose up, you were "rich" because you had more than a single room for you and your entire family in a communal apartment that would be condemned in the United States. Welcome to your bright future.

What's in the Constitution is irrelevant.

This is a Dictatorship of the Won. Get used to it.

The part that has me puzzled is that all this is going to paid-for by taxing the rich. How will there be any rich?

Any idea what he spent that money on?

We know it wasn't elocution lessons.

Russ, this is a great post. Thank you.

It's hardly surprising that he received so many bribes...er...contributions from the finance industry since he's the chair of the House Financial Services Committee. Of course, he knows nothing about finance or the financial services industry or compensation at all, but that never stops politicians. For example, while grilling the CEOs of the big investment banks, he asked them why they needed a bribe to do their jobs. I don't know...I think I would need to get something in return for working. Ron Paul is pretty much the only one on the committee with a clue and anything interesting to say and he is treated with derision and contempt by Bernanke every time the former CEO of the Princeton Economics department testifies before the committee.

Rafi,

The problem is that Barney is incumbently protected by McCain-Feingold - and is in Massachusetts. Drowning a girl isn't enough to cost you an election there, much less some minor crime, like male-prostitution.

This guy has got to go. People should organize a money bomb ala Ron Paul in '08. Get the funds to get Frank out of office.

Barney Fank is an experienced businessman, after all didn't he and his partner run a queer "call guy" service out of his apartment?

Can't knock him there. Gotta make that payroll ya know.

Having had to meet a payroll, why shouldn't he be in charge of deciding what other people make?

Besides which, the idea of beating your opponent is passe in America, the idea is that you have no opponent.....

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.ever again.

Think with a socialist president, socialist senate, socialist house, that they can't make that happen?

They b wurk'n on it chilluns.

Since Obama's moves have been even quicker and more drastic than I had imagined, and I was skeered to begin with, I am flabbergasted about what he will do next. I have no idea anymore.

The story of Bob Rae in Ontario politics does come to mind. But I'm not sure if it translates well in a federal rather than state milieu where deficits are more acceptable, or where the media is so incredibly accommodating.

I also wonder if big business is in any way beginning to question the intelligence of cozying up with big government. Maybe in banking, although as strange as it sounds, I doubt even in that industry that there are people thinking about it, or developing strategies to limit it. Call me a skeptic.

I suggest government intervention will get much worse. We still need to go through the commercial loan market failure even while the bulk of the ARMS reset.

See how that works? Do the banks bidding, and all you have to do for campaigning is send a note to any opponents telling them their hopes are crush, and resistance is futile.

Signed,

Barney Frank


Vic Pandit


Mr. Blankenfien

AIPAC does the same thing. Here's your agenda; do we need to show you the movie that covers the alternatives?

We need big money in government like Kennedy needed a parade in Dallas.

Civis,

Guilds are not libertarian. They are forms of domestic industrial protectionism and only secure benefits for the members enjoying the protection. The closest thing we have today to guilds are the professions such as doctors, lawyers and accountants who through legislation are able to limit entry into their fields as well as deny those without licenses their right to compete with them.

I believe Christopher Renner is correct about corporatism. I am not positive but I think in that theory, society is broken down into key industrial sectors and legislators are selected from the elite companies to make laws on all matters related to their sector such as pay scales, prices, tariffs, etc.

Regarding the original post on Barney Frank. The dems are over reaching and this type of extremism will certainly backfire on them. The best thing to do is sit back and let them orchestrate their own eventual demise. And besides, this country deserves to experience what it votes for.

Civis,

"Corporatism", in almost every use I've ever read, refers at least indirectly to Mussolini's Fascist Italy; more specifically, to the state control of business enterprises and unions which various socialists alleged would eliminate the supposedly destructive competition between labor and management.

Isn't this what they call "The American System"?

Speaking of...I keep hearing libertarians talk about "corporatism", but I'm a little fuzzy on what that is. Looking at Websters and Wikipedia, it sounds to me like a trade union or a guild, which I think are a good idea, done properly. I'll admit that trade unions in the USA have a spotted record. I'll also admit that guilds will not work in our country the way they did in medieval Europe. But I don't see what this has to do with the USA today, so something tells me I'm missing something. It seems to me that a libertarian would be in favor of a guild. I as a yeoman farmer or shopkeeper don't have much power when it comes to fighting big business or big government, but if all of us little guys get together, we could make things happen. The same for workers and labor unions.

I'm wondering if by "corporatism", people mean "mercantilism" (which Murray Rothbard defined as "a system of statism which employs economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state.")

I don't know if you can shed some light on that. Sorry for drifting off topic there, but it's something I'm trying to figure out in my quest to understand libertarians.

Any idea what he spent that money on?

Nice work.

What a devastating post.

Some nice detective work, Russ.

Can someone show me where in the Constitution it grants the congress, the president, or the courts the power to do this?

I'm not finding it.