A couple of days ago, I listened to Mort Zuckerman, the designated fluffer for banking executives, defend high executive pay against President Obama's cap on salaries. Maria Bartaromo and another commenter were ripping him to shreds. He held up as well as could be expected against the pitchfork brigade, but his arguments ring hollow. Follow below for more.
Zuckerman's argument boiled down to this: If you cap executive pay, those executives will go to other unregulated companies and earn whatever they want, leaving a dearth of qualified people at the banks that received bailout funds.
It's the "brain drain" argument in its simplest form.
So here are my problems with Zuckerman's argument:
1. Where will they go: There have been thousands of talented financial managers laid off in the last few months. They are all looking for someplace to land. What's to say that an executive like - oh, I don't know, John Thain - will get a better hearing than someone else looking for a job? If I were a bank executive, I'd be happy to have a job right now, and not be facing criminal charges.
2. What talent: The executives Zuckerman defends are the same people who got us in the mess to begin with. They are the people who authorized the CDOs and credit default swaps and highly leveraged positions. Where is the talent in pissing away billions of dollars? What is there about these guys in tailored suits that makes them special.
3. Where will they go 2: this is an extension of number one. Look, repeat after me: there is NOTHING SPECIAL about these folks. They can't read a spreadsheet better than their underlings. They don't know what to do any more than their underlings. In fact, I'd wager that there are some people below who really do know what they are doing who should probably be in charge.
4. It's not what you know: Look, let's face facts: It's not always what you know that gets you a cushy wall street job. It's who you know. Can anyone point me to a CEO who came from, say, Bowling Green State U.? Okay then, STFU! Let's get some people from middle American into the equation. People who know and can identify with the shit that is going on.
5. Fuck You: Okay, so this isn't so logical. I don't buy anyone making millions of dollars when the rank-and-file of their corporation is scraping to get by. Fuck them. I don't buy all those whiny half-assed defenses of the "current system." You know what, your system was fucked before you threw in your defenses. It was screwed to begin with. I don't blame individual traders, but I don't extend them sympathy either. I'm sorry if I don't feel your pain. You lost a paycheck- middle America lost everything. Fuck you.
Sorry if this seems ranty, I'm just a little pissed off, especially watching John Bohner and Mitch McConnell be the dicks that I know they were already.