Perhaps McCaskill's on to something, as the Wall Street Journal reports (here or here):
Wall Street's pay system isn't dead yet. But it is in trouble.The editorial page at WSJ weighs in, "Idiots Indeed":
President Obama's rhetorical assault on "shameful" bonuses reverberated across trading floors, investment-banking desks and executive suites Friday. Officials at several securities firms acknowledged that compensation, already down sharply because of evaporating profits, could shrink even more in the next few months as Wall Street scrambles to avert a government crackdown that some fear could be even more painful.
Sen. Claire McCaskill (D., Mo.) introduced legislation Friday that would limit the salary, bonuses and stock options of executives at financial companies getting federal bailout aid to no more than what the U.S. president earns: $400,000 a year, excluding benefits. In 2007, Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein earned that much in about two days.
In our experience, political nuance has never been the strong suit of Wall Street executives ... Yet the hard truth remains that whether on Wall Street or across the American business landscape, compensation levels are a business judgment made under the pressure of competition. The "idiots" notwithstanding, Wall Street has lots of highly talented financial minds and mobility among firms based on compensation is routine.Hat Tip: Memeorandum.
If Congress is going to start setting legal limits on salaries and bonuses in the U.S., it is going to drive talent out of Bank of America and these other banks and into institutions without such limits, perhaps abroad ... The danger of targeting what capitalists we have left for abuse or prosecution is that they will stay on strike, as they did in the 1930s. It won't be pretty this time either.
See also, Allahpundit, "McCaskill on capping pay of CEOs who take TARP money: “These people are idiots”.
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