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Bad timing??? SBA loans and Gov't mandated paycuts

Old 10-21-09, 05:03 PM
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Bad timing??? SBA loans and Gov't mandated paycuts

Potentially not the best timing wrt both of these stories coming out at once...

http://dealbook.blogs.nytimes.com/20...ness-stimulus/

President Obama will visit a Maryland business on Wednesday afternoon to announce initiatives to encourage lending to small businesses. According to an administration official, the proposal will increase the caps for existing Small Business Administration loans and give smaller banks better access to funds from the Troubled Assets Relief Program.

An industry official involved in S.B.A. lending said the White House would propose raising the cap on the agency’s flagship 7(a) loan to $5 million from $2 million. But other programs are likely to increase, too, including the 504 program. Read More »

http://news.yahoo.com/s/ap/20091021/..._executive_pay
WASHINGTON – The Obama administration plans to order companies that received huge government bailouts last year to sharply cut the compensation of their highest paid executives, according to a person familiar with the decision.

The seven companies that received the most assistance will have to cut the annual salaries of their 25 highest-paid executive by an average of about 90 percent from last year, said the person, who spoke on condition of anonymity because it has not been announced.

This person said Wednesday that the Treasury Department will announce the deep pay cuts within the next few days.

Kenneth Feinberg, the special master at Treasury appointed by Obama to handle compensation issues at the seven firms getting exceptional assistance from the government's $700 billion financial bailout package, is making the pay decisions.

The seven companies are: Bank of America Corp., American International Group Inc., Citigroup Inc., General Motors, GMAC, Chrysler and Chrysler Financial.

Total compensation for the top executives at the seven firms will decline, on average, by about 50 percent, according to the person familiar with the administration's decision.

At the financial products division of AIG, the giant insurance company which has received taxpayer assistance valued at more than $180 billion, no top executive will receive more than $200,000 in total compensation, the person familiar with Feinberg's plan said.

I guess one can make the argument that these issues aren't related, since one is "big evil corporations" and the other is about the "working man" but I suspect I'm not the only one who finds the Gov't establishing limits on pay a bit troubling... especially at that same time they are trying to get more businesses under the Gov't thumb w/ more loans. It is potentially going to have a damaging effect on people actually applying for the loans if they feel the additional "requirements" are too much to stomach.

Yeah I know before someone else says it booga booga
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Old 10-21-09, 09:44 PM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

These companies wouldnt exist if the government didnt save them. The people have spoken and no consequence bailouts have turned the people against the administration.

MY OPINION - Too big to fail and therefore directly tied to the health of the nations economy...Then WHY are they considered PRIVATE companies. Either get smaller or taken over
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Old 10-21-09, 11:43 PM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

I did not support the bailouts and I do not think any executive who ran a failed company should get bonuses. That said, I hate the idea that Obama is sticking his nose into this. There is no way the governement should ever get involved in this.
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Old 10-22-09, 12:13 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by DeputyDave View Post
I did not support the bailouts and I do not think any executive who ran a failed company should get bonuses. That said, I hate the idea that Obama is sticking his nose into this. There is no way the governement should ever get involved in this.
And what SHOULD they do, get held hostage by TBTF again in the future an allow no consequences again?
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Old 10-22-09, 12:28 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

To say that certain companies' receiving benefits from the government gives the government control over those companies has dangerous consequences, which I will now allude to.

I am not speaking German, went to public school, and use more roads than I would like every single day. That first benefit is greater than the biggest check from the treasury department. Is my person, then, open to government intervention?
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Old 10-22-09, 04:21 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Tommy Ceez View Post
And what SHOULD they do, get held hostage by TBTF again in the future an allow no consequences again?
Don't bail them out in the first place. But if you are stupid enough to give them money, don't whine about what they do with it, it is not the government's place. This is nothing but another step in promoting class warfare, which serves the statist agenda.

Show me where in the Constitution that any of this shit is legal?
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Old 10-22-09, 04:32 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

And don't blame these companies for taking government money, though it's tempting to do so. To say that the government now has total control over these guys is to say that anyone who takes any sort of government aid -- from a federally-insured student loan to straight welfare -- has given themselves wholly to the state, i.e., to slavery. Fuck that and fuck a "pay czar." As the good Deputy said, it's just a rung on the ladder to a publically-palatable sort of statism.
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Old 10-22-09, 09:42 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by DeputyDave View Post
Show me where in the Constitution that any of this shit is legal?
Necessary and Proper Clause and Commerce Clause?
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Old 10-22-09, 10:42 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Baloney

These companies positioned themselves to become so large that they could operate with the implicit guarantee that the Govt would back up their losses and blackmailed the Govt when it crashed. The people who ran these companies made a personal fortune over the fact that they could take unlimited short term risks which paid high bonuses because they could NEVER LOSE. They never intended for these banks to be stable or be able to weather a storm.

In a capitalist scenario a private company is paid based on risk, and risk implies the ability to lose it all. There never was ANY risk to lose it all.

NOW, the IRS also operates under the assumption that it can never be allowed to collapse, and so does the FBI, and AMTRAK, and the Pentagon. And in exchange, THEY HAVE GOVERNMENT CONTROL.

So my solution stands.

If you are too big to fail you have two choices

1) get smaller
2) get taken over
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Old 10-22-09, 10:15 PM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Hank Ringworm View Post
And don't blame these companies for taking government money, though it's tempting to do so.
Why not? Let this be a lesson to them - don't dance with the devil unless you're ready to accept the consequences.
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Old 10-22-09, 10:51 PM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by WallyOPD View Post
Necessary and Proper Clause and Commerce Clause?
Thus proving that Patrick Henry was right about the odious "necessary and proper" clause.
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Old 10-23-09, 03:45 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Duran View Post
Why not? Let this be a lesson to them - don't dance with the devil unless you're ready to accept the consequences.
"Why not?" is explained pretty well in the rest of my post. You know, the part you didn't quote.
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Old 10-23-09, 03:46 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by WallyOPD View Post
Necessary and Proper Clause and Commerce Clause?
Bullshit.
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Old 10-23-09, 09:51 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Hank Ringworm View Post
Bullshit.
Hard to argue with such a well-reasoned argument.
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Old 10-23-09, 10:40 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Hank Ringworm View Post
And don't blame these companies for taking government money, though it's tempting to do so. To say that the government now has total control over these guys is to say that anyone who takes any sort of government aid -- from a federally-insured student loan to straight welfare -- has given themselves wholly to the state, i.e., to slavery. Fuck that and fuck a "pay czar." As the good Deputy said, it's just a rung on the ladder to a publically-palatable sort of statism.
Considering that authority over executive compensation was an explicitly stated term of accepting TARP money, I think it's a pretty large leap to extrapolate that to anyone taking government aid of any sort is now a slave of the federal government.
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Old 10-23-09, 08:42 PM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Hank Ringworm View Post
"Why not?" is explained pretty well in the rest of my post. You know, the part you didn't quote.
No, it's not. It's a caution about the potential slippery slope of government aid leading to government requirements you may not like. It doesn't explain at all why I shouldn't blame the recipients of TARP funds for asking for the money in the first place. This is not an unusual case. For example, if you take Medicare patients, you're subject to Medicare rules.

I am against government interference in free markets. I am also against rent-seeking, but that's a whole other discussion. The financial sector took the money, and now they have to deal with the consequences.
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Old 10-23-09, 09:26 PM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

There was no government interference in the free market

It ceased to be a free market when the banks stated that they were going broke and BTW, we hooked up a doomsday device to the world economy so PAY UP BITCHES!
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Old 10-26-09, 12:40 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Duran View Post
No, it's not. It's a caution about the potential slippery slope of government aid leading to government requirements you may not like. It doesn't explain at all why I shouldn't blame the recipients of TARP funds for asking for the money in the first place. This is not an unusual case. For example, if you take Medicare patients, you're subject to Medicare rules.

I am against government interference in free markets. I am also against rent-seeking, but that's a whole other discussion. The financial sector took the money, and now they have to deal with the consequences.
We agree on the fundamental issue, I think, but you are taking a very short-sighted look at this situation.

Those companies took government money. But so have we all in some shape or form. Shall we all deal with the consequences of an authoritative state? (Not saying that this one is, but rather that it easily could be, should it extrapolate the rules on "WALL STREET FIRMS" to the American public.
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Old 10-26-09, 12:44 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by WallyOPD View Post
Considering that authority over executive compensation was an explicitly stated term of accepting TARP money, I think it's a pretty large leap to extrapolate that to anyone taking government aid of any sort is now a slave of the federal government.
If the government stated that control over what vehicle you drive was an explicitly stated term of using state-maintained highways, would that be okay? If the government stated that you cannot eat cheeseburgers if you buy into a state-mandated health care program, would that be okay?

I can see your points -- I actually supported TARP for a while -- but you must see that you are opening yourself up to tyranny.
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Old 10-26-09, 12:46 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by WallyOPD View Post
Hard to argue with such a well-reasoned argument.
And your argument was, and I quote:

"Necessary and Proper Clause and Commerce Clause?"

Quite well-reasoned.
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Old 10-30-09, 02:20 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Let me rephrase that. Can you come up with an argument, based on either the commerce clause or the necessary and proper clause, which doesn't suggest that Congress has unlimited powers? i.e., that is not in stark contrast with the spirit of the Constitution?
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Old 10-31-09, 12:57 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Anyone?
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Old 10-31-09, 09:51 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Hank Ringworm View Post
If the government stated that control over what vehicle you drive was an explicitly stated term of using state-maintained highways, would that be okay? If the government stated that you cannot eat cheeseburgers if you buy into a state-mandated health care program, would that be okay?

I can see your points -- I actually supported TARP for a while -- but you must see that you are opening yourself up to tyranny.
Does your state not have any requirements on vehicles that are allowed to be driven on public roads? That seems odd to me since every state I know of limits the type of vehicles that can use public roads, requires that cars be registered every year, and requires that the car pass some sort of state mandated inspection at regular intervals. Isn't that explicitly stating what you can drive?
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Old 11-01-09, 01:42 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by slappypete View Post
Does your state not have any requirements on vehicles that are allowed to be driven on public roads? That seems odd to me since every state I know of limits the type of vehicles that can use public roads, requires that cars be registered every year, and requires that the car pass some sort of state mandated inspection at regular intervals. Isn't that explicitly stating what you can drive?
What seems odd to you? The imagined answer to a question that you asked the moment before? No wonder.

Explicitly stating maximum pay is very different from establishing minimum safety standards. One involves the public good; the other does not. One, you might say, is "necessary and proper," while the other clearly is not.
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Old 11-01-09, 07:42 AM
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Re: Bad timing??? SBA loans and Gov't mandated paycuts

Originally Posted by Hank Ringworm View Post
What seems odd to you? The imagined answer to a question that you asked the moment before? No wonder.

Explicitly stating maximum pay is very different from establishing minimum safety standards. One involves the public good; the other does not. One, you might say, is "necessary and proper," while the other clearly is not.
You asked if it was okay for the government to explicitly state what kind of car you can drive. Considering states already do that I was asking you why you even think it's a question. The answer is yes, it is okay.

Regarding your other point, until the government is repaid the bailout money it is in the public interest to make sure the companies don't make decisions that will delay the repayment, or make the repayment less likely. These companies have an easy remedy if they don't like the strings attached to government bailout money, don't accept it, or pay it back.
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