Living Within Somebody's Means

The New York Times published an article arguing that the half million dollar salary cap requested by Obama for bank executives under the bailout plan isn’t realistic for NYC. The article wasn’t totally in earnest, but let’s make sure that NYC delight with its own costliness doesn’t excessively distort reality.

It may be true that bank executives have become accustomed to million a year life-styles, but they are going to have to realign their perspectives. In the first place, the limit is partly symbolic. They will probably find ways around it. Limits on compensation don’t necessarily preclude creative variations. There will probably be loopholes that allow some flexibility, if not too much. The only hope is that a definitive statement of limits will convey the message that some restraint has to be applied.

A hundred thousand a year mortgage in NYC may not be so unusual, but there is no valid principle on which bankers should continue to maintain wealth at the expense of people who have no jobs. Plenty of people are available to replace bank executives, and experience has shown that it might not be that bad of an idea. I’ve known grapefruit with more aptitude and moral principle. We have no obligation to be grateful for the opportunity to keep banks in business by rewarding the administrative class that both failed to forsee and to manage financial failures effectively, and as far as I’m concerned, that responsibility trickles pretty far down the food chain in the management of those organizations.

The name of the game is redistribution of wealth, unless we want to play O’Reilly-Limbaugh free market depression disparity again, and I fail to see the justification in that. Civilized accumulation and retention of wealth requires the cooperation of a complete society, not just individual performance. If you don’t believe that, I have some Congolese rebels and Russian Mafia I’d like to introduce you to.

Let them refinance their mortgages or give up their houses and move into five-thousand dollar a month apartments instead of ten thousand a month houses for awhile. If they don’t like it, let them go find jobs in Iceland, where people will appreciate their talents for what they are worth. Better yet, let them subdivide their million-dollar bungalows and rent out the back bedroom so they can get in touch with reality. Their children might even have to attend, shudder, public schools, where they would be crammed elbow to elbow with financially challenged low-lifes like me.

Here's thinking for you.

Iffy