Scoopsville: Watch for Ald. Ed Burke (14th) and Ald. Leslie Hairston (5th) to introduce an amendment to the city's municipal code that may send shock waves through Wall Street.You know this is just another way of making business the boogie men. To be sure these business executives making millions or however much they make while running failing companies or indeed they're running companies that engage in bad business practices, they make an easy boogie man. Still I question the logic of attempting to control how much a company can pay their talent.
• • The buckshot: Sneed hears the aldermen want to make greedy investment bankers -- involved in the nation's economic collapse -- ineligible to underwrite city debt unless they agree to cap executive compensation.
• • Translation: No firm can award more than $400,000 in compensation for all executives.
• • The upshot: "This would be a cold slap in the face of greedy executives paying themselves millions of dollars in compensation packages," Burke said. "The legislation is intended to shoot bullets at a Gucci gulch gang of lobbyists trying to protect the bad guys."
• • Translation: The aldermen claim it's a backdoor way of making investment bankers more accountable to taxpayers.
I can appreciate what Burke is doing. Obviously he's somewhat bothered by the fact that some of these Wall Street firms are collapsing and that government is about to bail them out. The best deterrent to me as far as putting a dent into such events as this whole sub-prime crises is to let these businesses fail. If you want your business to succeed you won't engage in short-term investments and if you do hopefully you won't be stuck with them.
I agree something should be done. I would imagine that the financial industry won't engage in activities such as this anymore. Government will apply some more regulations though it could be debatable as to whether that's the answer or not. Still this is a problem and there needs to be a change somewhere.
For further reading might I suggest you go to this post over at Newsalert that brings to our attention an article from New Geography entitled, "Back to Basics: The Financial Crisis Requires a Paradigm Shift".