Discussing the Obama administration's plan to cap salaries for executives at banks that received federal assistance, Mike Barnicle asserted on Morning Joe: "It's fun holding [the banks] up and saying they can only ... make 500 grand a year if they're going to take federal money." But he did not disclose that his wife is the chief marketing officer and Northeast president of Bank of America, which reportedly was among "five of the biggest companies" to receive federal bailout funds.
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On the February 4 edition of MSNBC's Morning Joe, political analyst Mike Barnicle referenced reports that President Obama will require banks that receive a significant amount of money from the federal government to cap the salaries of their top executives and asserted: "You know, it's fun -- it's fun making fun of the banks. It's fun holding them up and saying they can only get -- make 500 grand a year if they're going to take federal money. When are we gonna get around to looking in the mirror? Everyone out there went out and took a second mortgage to buy a big-screen TV or add a deck onto their house because they thought money was free. Nothing's free." However, at no point did Barnicle disclose that his wife, Anne M. Finucane, is the chief marketing officer and Northeast president of Bank of America, which, according to The New York Times, was among "five of the biggest companies to get help" from the Treasury Department's Troubled Asset Relief Program (TARP). According to her Bank of America biography, Finucane is also "the managing director of Bank of America's Political Action Committee (PAC)."
In a February 3 article, the Times reported that the "Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan." According to the Times, "Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends." A February 4 Bloomberg News article reported that "[t]he guidelines will focus on companies that, going forward, take 'exceptional' amounts of bailout money from the Treasury, as Citigroup Inc. and American International Group Inc. have in the past. They won't be retroactive to companies that have already taken rescue money, although those companies must agree to strict monitoring and oversight."
A February 4 White House press release on the rule change stated: "Today, the Treasury Department is issuing a new set of guidelines on executive pay for financial institutions that are receiving government assistance to address our current financial crisis. ... The guidelines distinguish between banks participating in any new generally available capital access program and banks needing 'exceptional assistance.' ... If a firm needs more assistance than is allowed under a widely available standard program, then that is exceptional assistance." The press release added: "Banks falling under the 'exceptional assistance' standard have bank-specific negotiated agreements with Treasury. Examples include AIG, and the Bank of America and Citi transactions under the Targeted Investment Program."
From the February 4 edition of MSNBC's Morning Joe:
JOE SCARBOROUGH (host): There are conservative Christian colleges that for a long time have refused to take Pell Grants. And you know, he says, why don't you take Pell Grants? And they would say, because a federal government that can give us money is a federal government that can step in and tell us how to run our schools.
MIKA BRZEZINSKI (co-host): Well, I -- yeah.
SCARBOROUGH: And they won't do it. And that's what's happened with these banks now.
BARNICLE: Yeah. You know, it's fun -- it's fun making fun of the banks. It's fun holding them up and saying they can only get -- make 500 grand a year if they're going to take federal money. When are we gonna get around to looking in the mirror? Everyone out there went out and took a second mortgage to buy a big-screen TV --
BARNICLE: -- or add a deck onto their house because they thought money was free. Nothing's free.
BRZEZINSKI: I agree. I agree.
SCARBOROUGH: Nothing's free. And then you --
BRZEZINSKI: I think people are paying out there, though, Mike.
SCARBOROUGH: You also --
BRZEZINSKI: I think people losing their homes -
SCARBOROUGH: Well --
BRZEZINSKI: -- are paying the price.
SCARBOROUGH: The problem also is these banks have gotten this money.
BRZEZINSKI: They have.
SCARBOROUGH: And now they're trying to push them to make bad loans again to people that aren't going to be able to pay back that -- if I were a banker right now, who would I -- who would I give money to? This economy is in freefall. We don't know how far it's going to go. So what do they want me to do? Use more federal money to make more bad investments on more bad mortgages, which will have to be bailed out again in the future.
It is a vicious cycle, and it is stupidity to say to banks, "We've given you this money, now we want you to spend it on more bad loans." How about giving the money, letting them keep the reserves there, so the banks actually are solvent?