The car czar and the comptroller's buddies
Obama's car czar, Steve Rattner, turns out to be a person of interest in the state pension fund scandal involving the cronies of the former New York State comptroller, Alan Hevesi. Rattner allegedly paid one of Hevesi's cronies to facilitate a major investment of pension fund money in Rattner's company.
The Obama Administration is OK with bankruptcy for General Motors, which would let the company toss its union agreements.
But the Obama Administration won't let any big banks go into bankruptcy.
The Obama Administration has also persuaded Congress not to pass any meaningful limits on executive-compensation at bailed-out banks. Obama himself implied that heavily taxing bonuses at bailed-out banks may be unconstitutional, and the bill which passed the House to do that subsequently wasn't voted on in the Senate.
Posted by: Eric Jaffa | April 19, 2009 at 06:24 PM
Automakers can operate during bankruptcy. Banks can't.
And I'm sorry, but taxing a specific industry at 90% while giving another a free pass is deeply disturbing, even if five Supreme Court justices do think it's constitutional.
Posted by: Alon Levy | April 19, 2009 at 07:20 PM
The bill passed by the House applied to individuals who worked at any corporation which took over $5 billion in TARP money.
They would have been taxed 90% on the part of their bonuses which exceeded $250,000/year.
Most people at almost any corporation don't make that much.
Even those individuals still could have received an unlimited amount in salary.
The idea of someone having to get by on an effective bonus of only $250,000 doesn't bother me.
Unfortunately, the Senate didn't pass the bill.
Posted by: Eric Jaffa | April 19, 2009 at 09:12 PM
I wonder if people in the US have any idea of how this looks to those of us outside the states.
The superficial appearance of this and so many other stories about the Obama administration appointments is that everyone who is senior enough to be considered for this sort of post will be found to be involved in, or it least alleged to be involved in, some sort of financial chicanery.
Either the investigative process is flawed, or the US is more corrupt than thought previously.
Posted by: Gordon | April 20, 2009 at 12:58 AM
The bill passed by the House applied to individuals who worked at any corporation which took over $5 billion in TARP money.
Exactly - TARP is a program that funnels subsidies to financial institutions, even those that don't need it to survive. The tax does not apply to any other corporation that takes money from the federal government. Where is the 90% tax on the overpaid CEOs and managers of GM?
They would have been taxed 90% on the part of their bonuses which exceeded $250,000/year.
Bonuses, but not income. The banks would've just changed the definitions to avoid the tax. Do you believe any income over $250,000 should be taxed at 90%? Or do you just hate the banks, the way Congress does?
Posted by: Alon Levy | April 20, 2009 at 02:18 AM