CONGRESS SHOULD REQUIRE LIMITS ON EXECUTIVE PAY FOR THOSE BANKS THAT SELL JUNK TO TREASURY

Many bloggers have commented already on that specious argument of Bush and Paulson to the effect that, if Congress puts salary restrictions on top executives of banks and brokerage firms that sell their junk investments to the Treasury, it will prevent significant participation.

Dana Milbank of The Washington Post has an especially sarcastically funny article.

But consider this. You're a big executive of Citibank or Goldman Sachs with millions or billions of worthless bonds in your inventory. Would you decide not to participate in this billion dollar government giveaway and bailout when you could sell the toxic junk to the government for 100 cents on the dollar when the junk is worth maybe only at best 10 cents? Don't tell me that you would walk away from the chance to double or triple your company's bottom line in this way because you don't want to take a cut in pay, from say 10 million to only two million.

That's the Bush/Paulson argument why Congress should avoid hassling those guys making 10 million plus whose only reason for such pay was that they nearly bankrupted their companies and drove them to almost total financial ruin.

Oh yeah, right!

Congress needs to step back away from the brink of handing Paulson his 700 billion and think this one out more carefully. Executives should not be rewarded for the lousy job they have done. To the contrary. If they want their banks and brokerages to turn worthless junk into pure gold, they need to put some of their own money into the pot.