Barnicle complained about caps on salaries for bank execs without noting his wife is one
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SUMMARY: 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.
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 --
SCARBOROUGH: Right.
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?
I agree one hundred percent, but I'm not sure the public at large will. How many times in the last few weeks have we been told that you just can't get a decent CEO for less than 10 million a year? Unfortunately, that myth has been spoonfed to the masses for so long that a lot of people believe it.
Many people think it's the CEO's RIGHT to make an obscene salary... it's the American way.
I read someone this morning complaining that bank managers NEEDED their bonus money in order to afford the lifestyle they're accustomed to. As if the idea that you might have to downgrade IN A NATIONAL RECESSION is just a completely incomprehensible idea. Welcome to the real world, financial sector!
I think you've hit upon what has been heretofore remained unspoken...it's the offensive sense of entitlement. Times are bad for everyone...why are people in the financial sector so special that they should be immune?
Hey Barnicle, you're nailed, you big phony.
I've actually heard this from a friend of mine who does work in the financial sector. She receives, on average, about $80-$90k/year in a bonus payment, and was complaining that because of the bailout, she might not get that (on top of her salary of almost $200k/year mind you). I mentioned to her that maybe she'd have to take a shorter vacation this year (she went to brazil for a month and a half last year), or would have to maybe purchase bicycles that were cheaper (the bike she bought last year retailed for over $10k). She took offense that she would have to tighten the old belt, and wouldn't know what to do. Oh, and she was complaining that she "had" to live in such expensive cities such as San Francisco and NYC. As if people who make less than $200k don't live in such places. Hey, she might have to give up that $6000/month apartment on the Embacadero and move somewhere more reasonable, but alas, she doesn't want to do that. Now take her attitude, and multiply that by a lot, and we have the executives of these failing and flailing institutions.
Bless her heart.
She's special...
Yes, and she's one of our 'job creators,' too, so let us pray.
...she might have to be content to get to know her own state of California, where presently I will guarantee you she cannot name half a dozen of the 50-plus counties...
Not to mention, back in the fall, the LA Times had an article about "Wall Street Wives" who were worried about their husband's jobs, and had to cut back. Their main complaint? " It's so sad to walk through the mall and know you can't stop and buy things like you used to."
Keep in mind, I was reading this article while packing my husband up to deploy to Iraq for seven months. Talk about cultural disconnect.
Our best to you and your family.
Who can afford to just get to the mall nowadays?
Exactly! Every "ordinary" person, when hitting rough spots, makes cut-backs in their spending. Shorter, or no vacation. Put off that gas-guzzling SUV purchase, or sell the villa in Tuscany. We're not talking "comfortable", here, but WEALTHY. Many affluent individuals got that way by hard work and the production of goods and services for the rest of us and by providing employment to many, including health benefits and retirement insurance.
Exactly! and government should do exactly the same, make cut backs in their spending.
But, if everybody stops spending, our economy collapses. Like it or not, our economy is built on consumer spending. Maybe that's less than desirable, but it's reality.
i specifically said the government, i didn't say everybody, as in the people who earned the money.
Money has to be pumped into the economy in order to get it going, and since the only thing that can do that now is the government, they have to spend, spend, spend. It's up to them-- not "taxpayers," not "rich people," not regular citizens.
This is such an inviolable, macroeconomic principle-- like the theory of gravity-- that for nutjob Republicans to deny and fight this necessity is like them jumping off a cliff in order to fly out to a dinner date.
Only problem is, they want to take us with them!
i also agree. If you don't want your salary capped, then don't take our money. it's quite simple.
Sort of on another note, something I heard earlier today. Faith based groups are getting angry, because Obama has said (and hasn't implemented this yet) that faith groups who take federal funding can't discriminate in their hiring practices (as in, they can't fire someone who is gay just because they're gay). Simple solution, you don't want to follow the federal hiring and firing rules, don't take federal money. Same for these banks, and other corporations.
This whole meme about you can't get a decent ceo for less than 10 million is BS in my opinion. If you limit their pay, on the corporations/banks, taking our money, then I'm sure they'll all be on par, and heck, they can't be too good to begin with, since they've lost billions upon billions of dollars. How good are they to start with?
Well, I think that's a good observation. I've read somewhere that part of the problem is that many CEOs serve on each other's boards of directors. It's the ultimate "Good ol' boys club".
And of course, you are free to leave a bank that has to cap. I think their are more than a few qualified people who can work for the outrageously low salary of 100,000-500,000 per a-nus (I mean annum). I'm sure there are several CEO jobs in finance for 10 mil plus just waiting to be had.
In my wide reading of major newspapers and blogs, the disgusting greed of the executives getting these vulgar bonuses is being exposed for all to see. I am very happy that this practice is finally being publicized the way it should have in the past. The arrogance of these "entitled" super-capitalists has needed to be uncovered for the rest of the public. I am not against people making money, but how can an individual "earn" billions by failing? Obama should INSIST that this money be returned immediately. I really hate to agree with Joe Blow, but he did make a point about banks continuing to give loans to people who may not be able to pay. Everybody's job is on the line right now. There is almost no security for any worker in any industry these days and the banks would be insane to finance someone who may not be able to pay the loan back. As Yul Brenner said, "IS a puzzlement!"
What an embarrassing undisclosed personal plea for a seven-figure bailout. Easy, Mike, you're playing a working stiff on the TV, not a stay-in-studio husband.
Ooops...sorry, Mike, but there goes your regular guy persona. More and more Morning Joe looks like the home of second-stringers and castoffs.
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.
I will assume you and your wife paid cash for yours, Mike...
You can try to deflect the responsibility for this economic crisis if you want, but it's well-known that it was all the trailer-dwellers going out and forcing those poor banks to give them money for a deck or a tv that drove them to ruin. The unfortunate honest-but-naive bank execs practically had a gun to their collective head, and fell victim to the cons of the wily copier repairmen and grocery store clerks who talked the appraisers into over-valuing their homes so that they could borrow more money than they knew they would make in their lifetimes, probably hoping for a liberal socialist to take over the reins of government and bail them out when they defaulted and....
Well, I'M SORRY! But I always get riled up when I see the big spender liberals trying to force someone to live on a measly $500k/yr (not including stock options and perks).
Admit it.... you copied that directly from the RNC website, didn't you?
Not quite, but I'll bet if I sent it to them, they'd publish it.
They are pretty busy right now proving that stimulus for jobs for people here in the U.S. is akin to communism. That should fit very well into their theme.
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.
This falsehood continues to appear everywhere (including by posters on this site). The greater causes of foreclosures are falling home prices, people losing their jobs, and the higher cost of necessities from energy to health care.
Well of course. It makes it easier to deny help if you think that people don't deserve it. Every day the news has stories of people who did "everything they were supposed to" and are still in debt. As if those people are the exception to the rule as opposed to the other way around. In a housing collapse that the National Association of Realtors was SWEARING was over a year ago, MOST people who are hurting did "everything they were supposed to", and our system failed them.
What makes this even more hilarious is that the same people defending these poor bank CEOs will hyperventilate if a person receiving Welfare money buys a $50 color TV.
SCARBOROUGH: How about giving the money, letting them keep the reserves there, so the banks actually are solvent?
And exactly how does that stimulate the economy right now, Joe? How about we bail out the auto industry and not require them to make cars?
Someone please point out to me where Barnicle complained about the cap. I don't see it.
He did not say it was a bad idea, he simply and correctly stated that the mess we are in is not solely the fault of the banks. Plenty of people ran their personal finances in an irresponsible manner.
Read the words that follow "BARNICLE:"
Maybe it was Barnicle's own words and the context in which he spoke them that gave the impression he was unhappy about the cap. He certainly could have said he favored the cap and still thought the banks were not entirely to blame. But he didn't. After all Barnicle does speak and write for a living...you would think he could have expressed himself more clearly if if your interpretation is correct. Or perhaps he's just another hack who has no business trying to express himself on important matters to a national audience.
Whether he complained about the cap or not, he has an obligation to say "for full disclosure, my spouse is someone who would be affected by this cap because of her position with Bank of America."
But he's just saying that it's fun to say that bank CEOs can only make 500 grand a year if they're going to take federal money. He's not saying that it's not fun to enact such measures. (kidding)
"Plenty of people ran their personal finances in an irresponsible manner."
Aren't the people you speak the same people that are losing their jobs, their health care coverage, their pensions, their 401k's, their IRA's, and their homes right now?
Are you concerned that they are not being sufficiently made fun of?
They're already paying a HUGE price, so I don't think it's too much to ask that executives who ran institutions into the ground make due with less if they want the government's help.
It's really really hard for me to drum up any sympathy for someone who can't get by on $500,000 a year.
These guys have built a house of cards by nesting investments inside of other investments and pushing them around the board like checkers. Now that it's collapsed around their ears, they expect us to believe that they're just too damned valuable and smart to work for less then 10 million.
Pi$$ on 'em.
I think $500k is pretty damn generous for people who are more deserving of a swift kick to the curb.
I'm not opposed to limiting executive compensation when they accept bailout money.
I was simply pointing out MMFA's disingenous headline (IMO).
Whether he complained about the cap or not, he has an obligation to say "for full disclosure, my spouse is someone who would be affected by this cap because of her position with Bank of America."
It's not a disingenuous headline at all.
I'll even 'fess up here. I have way too much credit card debt. The difference is that I am now cutting back and trying to do something about it. A lot of people have realized their mistakes and have curtailed their spending.... that's one reason we're in a recession.
The banks are partly responsible for their own dilemma... is it too much to ask that they modify their behavior, especially if they want taxpayer money?
I just finished paying mine off (again) last month. Now the wife on the other hand, that's a horse of a different color.
Let me throw this out for discussion...Does anyone in his right mind seriously believe that any caps on salaries and bonuses of banking exceutives would remain permanent? Or is this part of a stop-gap measure until things eventually turn around? Times are tough everywhere in America. Why should banking executives be immune? Where does it say that in any industry any executive is permanently guaranteed an exorbitant income?
The banks are partly responsible for their own dilemma... is it too much to ask that they modify their behavior, especially if they want taxpayer money?
The banks are wholly responsible for their dilemma. Yes, bad loans were made, people bought houses they couldn't afford, but those maxed out homeowners did not come up with the idea of credit derivative swaps, Wall St. did. And, irrespective of that, the Banks had bad business models. In what world is leveraging at 40:1 a good idea?
I think if a bank takes taxpayer money, the government has a right to impose salary caps. If the government becomes your largest shareholder,it should have a say in how the company is run.
I smell wealth envy...
No, it's called fairness...and we're all in this economic predicament together.
Not really.
I'm still waiting for MY bailout check.
They could always turn down the TARP money if they think it's "unfair".
If you don't know how to live well on $500,000 a year, you're too stupid to run a company.
or don't have a vision ( like perhaps spend your largesse on R&D expaNDING/IMPROVING YOUR PRODUCTS.
Good point. Give me $500k/year, I'm sure I could do just fine on that.
Isn't is strange that the hourly American worker has had to work for less money because of foreign competition but at the same time, the officers of the American companies don't work for the smaller salaries that their counterparts in other countries earn.
True enough, true enough. In looking at, for instance, Toyota executives (I use a lot of automotive stories, because that's my business right now), if you take their entire board of directors, CEOs, and top execs, add all of their salaries together, it is still less than Wagoner's from GM, and Toyota has been making money when the Big 3 are losing it (they took a downturn here recently as well).
Also, something that's very Japanese, when they have a downturn in their market, they try, try really hard, to NOT lay off workers. If they're not building cars, they assign them other tasks, or jobs (cleaning, groundskeeping, and other things, at the same pay rate), so that when business picks up again, they don't have to either re-hire them, or train new workers.
I'm all for the salary caps except it should've been in the original package. It pains me to say it because I think executive salaries are way too high but it's not really fair to add this stipulation now after they already have the money. Like everything about the original bailout they cocked it up.
You're probably right. I'd also like to see them tell the banks to either start lending the money or give it back. Probably too late for that, too.
What bothers me more than anything, aside from the high salaries these morons make is this, take the Home Depot for instance. Bob Nardelli used to be CEO for Home Depot( I know this as my son is a huge Tony Stewart fan). A few years ago he was fired for costing the company so much money, but he left with his huge golden parachute. Now he is CEO for Chrysler and I'm sure he didn't take a pay cut. Why on earth would one company hire a person who has a track record of running the other company in the ground to run their company? So now the last time I saw him he was in front of congress begging for money for Chrysler.
Why don't these congresspeople ask these losers why they make so much money running companies into the ground?
Cut these people's salaries to 500K temporarily. I'm sure I'm quite capable of living on such a small amount of money.
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This is an outstanding easily accessible overview of the bonuses that you can share with mono-vision friends (who likely take their news from single-sources). Jonathan Altman seems to be becoming a little more forthright. Don’t skip the second page, well-stated stuff there. Here's the link and an exerpt below: http://www.newsweek.com/id/182535
“The biggest excuse offered for bonuses is that if executives lose them, they'll go work elsewhere. The obvious question is, where? The Street is dead. Dealmaking has come to a virtual standstill. While some might flee to boutique firms that aren't getting federal money, those firms are hardly flush these days, either…
…let's review what happened to the average person in the last six months. First, these financial geniuses made a series of bad decisions that cost us at least 30 percent of the value of everything we own. Then we gave them $700 billion of our children's money so they could stay afloat. And now they're rewarding themselves for their incompetence with our tax dollars. This is what our casino culture has brought us, and it cannot stand.”
I really love the blur of http protocol, in the morning, don't you? No idea what the tangle of nomenclature is, at the top, but I'm sure it's somehing that would have deep meaning and demonstrate vast insight if I knew what it was, how it got there, and if anyone coould read it. Needless to say, if you can't read the first paragraph, you don't have clearance and may start with the second one. Apologies.