Vail Daily’s view: Let’s put some brakes on bailouts
Vail, CO, Colorado
Is there any industry in the United States that isn’t at least considering going hat in hand to Congress, seeking money for a “rescue?”
The financial business was first, of course. And, in a show of spine unusual for our elected representatives, Congress authorized a $700 billion package despite howls of protest from constituents. The domestic auto industry is at the plate now, prophesying dire warnings of economic apocalypse unless taxpayers provide billions in immediate assistance.
Reasonable people can make persuasive arguments both for and against government bailouts of industry, but even the most ardent supporters of federal help for industries suffering from mostly self-inflicted wounds have to cringe when they read stories about corporate retreats for AIG executives, CitiGroup’s continued commitment to pay $400 million over 20 years for naming rights to the new ballpark for the New York Mets or obscene bonuses for executives of these flailing firms.
For the sake of argument, let’s say these bailouts are necessary to restore this country’s economy to good health. Fine. If that’s the case, though, we want to see one giant string attached to federal aid for industry:
If any company seeks federal bailout aid, that company’s CEO and board of directors must resign immediately. No severance packages or bonuses will be allowed. Pack up your offices. Get out. Leave the artwork on the walls, please.
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If you screwed up your company badly enough to have to come crying to Uncle Sugar for help, you have to leave, and you can’t work in that industry for another five years. No exceptions.
Moreover, the pay of any incoming CEO will be capped at $1 million per year until all taxpayer money is repaid. Hey, the CEO of Toyota makes “only” $1 million per year, and that’s about the only big company in the universe projected to be in the black for 2008.
With that big, sticky string attached to any federal aid, the guess here is that the line for federal bailout money will get a lot shorter in a big hurry.