The decision by the Obama administration to review and put limits on the pay of top executives of the financial institutions that have received taxpayer bail out funds will be hugely popular, except on Wall Street.
The first review extends for the moment to the top 100 executives of the seven largest recipients of bail out funds. Almost certainly, this is a virtual Who's Who of major contributors to the campaigns of the president and many Democratic leaders in the Congress.
I'm impressed.
If this initiative actually has teeth and bites, it will be the first real sign that the president has the political courage it will take to begin to rebuild the battered prosperity and shattered confidence of the American people
The administration also wants legislation to give shareholders more say in the executive compensation of companies whose stock is traded publicly, and wants generally to begin to tie executive compensation to long term results.
The specifics of such legislation will be contentious, but the goals are both important.
The collapse of the American economy did not just happen. It is the result of decades of policy that elevated corporate profit above almost every human need, measured corporate success by the quarterly statement instead of long term productivity, and systematically reduced the wages of ordinary Americans while the pay of top executives went through the roof, further concentrating the wealth of America in the hands of a few.
Statistics vary depending on the source, but on average CEO salaries in the U.S. in 1980 were about 52 times greater than those of the average worker, but now are almost 350 times greater,
So the president is attempting to deal with a long term trend that has proved destructive to the American people. A lot more of this will be required, and it is going to take a lot more leadership and political courage.
The American people and federal government both are drowning in a sea of debt. The current deficit (what the federal government will spend this year over the revenue it will collect) is projected at $1.8 trillion, and may well be greater. The nation's debt (what the U.S. owes foreign lenders) exceeds $5 trillion.
When then Senator and now President Obama embraced the Wall Street bail out, he shot himself and the nation in the foot. Now there is no money for the massive infrastructure projects that would have employed millions in productive work of lasting value to the nation - not without taxing someone to pay for it.
Yet the president insists that now is the time for a very expensive expansion of federally funded health care. He says it can be paid for by savings in the way health care is now managed.
Prove it.
Before enacting a health care "reform" that will place yet another financial burden on the American middle class that is shrinking daily, scale back the new proposals to more modest objectives, put real savings in place first, demonstrate the savings and then expand the new programs, if that is what the people and Congress want.
Every uninsured American does not need the expense of a private health care policy right now, and the nation cannot afford to pay for those who will turn to a new federal subsidy. But every American should know if they are ill and be treated.
Require every uninsured American to have a health check up, which can be provided for free by every private physician or health care facility in the nation. Let the AMA round up the physicians. The cost can be deducted from the providers' income before taxes.
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