Where have we seen this before? The White House has a lot of talk. Then a pay czar is appointed. After some period, a damning report is issued. Then we have the public scolding, while legislation, policy and amendments are ignored and defeated, often by the very same administration.
Any action on the latest outrage du jour? Nah.
Such is the the Obama administration's pay czar's report. To be fair, the Pay Czar was given no power to actually get the ill gotten gains back. He also was limited to institutions who received TARP funds, not the real bail out going on at the Federal Reserve.
The Special Master for TARP Executive Compensation, Kenneth R. Feinberg, a.k.a. Pay Czar, was chartered to monitor executive compensation of bailed out financial firms. This covered 419 banks who received TARP funds. 17 of those banks handed out ill-advised executive compensation tallying $1.6 billion dollars. $1.6 billion dollars equals 26,666 $60,000 a year salaries. In other words, to feed the executive pig, 26,666 people went without a job.
The Special Master did not determine that any payments were "inconsistent with the purposes of [Section 111 of the Emergency Economic Stabilization Act of 2008] or the TARP or were otherwise contrary to the public interest." The Special Master had no authority whatsoever to force repayments from employees or companies.
The justification to not get the money back is 90% of the $1.6 billion was from banks which repaid TARP.
Of the $1.7 billion in payments identified by the Special Master, more than 90% were made by firms that fully repaid, or were taken into consideration in the Special Master's determinations regarding "exceptional assistance recipients."
That's nice. Uh, what about the trillions in bail out funds coming from the Federal Reserve?
What's interesting is while the main stream media duplicates the same article headline that somehow this is a scolding and a blast on Wall Street, the real Wall Street Press, sees it for what it is, an empty aw shucks.
The Wall Street Journal, calls the report a whimper:
If you were seeking further signs that that Washington’s war with Wall Street may be coming to an end, look no further than Kenneth Feinberg’s just-released report on bonus payouts at TARP banks.
In a word: Boooring.
The barebones news release from the Obama Administration’s Pay Czar avoids the kinds of juicy , headline making details that Wall Street has come to dread. Feinberg’s latest report names no names executives earning billions of dollars on the taxpayers’ dime. It doesn’t even cite any specific banks. Instead, it is a from-the-helicopter view of Wall Street’s pay practices.
Barron's, the bastion of warm fuzzies for the investor class, title their coverage, Goldman et. al Walk Scot-Free From Feinberg Review.
Ain't that right and no wonder with a former Goldman Sachs lobbyist as Treasury Secretary Geithner's chief of staff, whose previous job was lobbying against any legislation reining in executive compensation.
Bloomberg, went crazy with sarcasm quotation marks in Feinberg Says Companies Should Adjust Pay Policies for `Crisis', which outlines the accomplishments or lack thereof on restructuring executive compensation in the United States.
So, here we are, with millions of Americans desperate for income, for jobs, while the exact same system which brought the economy to it's knees goes on unabated.
We've had plenty of exceptional proposals and expert recommendations to restructure executive compensation and corporate governance. It's only the United States economy on the line. So, of course, we get a public scolding and a whimper.