"We can presume that the senior executives of the banks that have received TARP funds who are paid more than $500,000 annually are worth at least that much to their employers. Otherwise the employers would be violating their fiduciary duties to their shareholders by paying those salaries."
We certainly can't presume that. These executives are their own employers, sit on each other's boards and grant themselves billions of dollars in cash and stock. That's part of the problem.
Your argument is the same as "if they have nothing to hide, then they have nothing to worry about"
The point Napolitano is making that is unconstitutional for the government to ask an entity to surrender his constitutional rights in exchange for funding.
Just like the government cannot abridge free speech of welfare recipients or PBS.
I disagree on both counts. Free Speech is pretty clearly in the Constitution, but which part of the Constitution protects my rights to get paid without limit?
It seems not unlike a bank granting you a loan, but only if you use the money for home repair.
Article I Sec. 10
No State shall ... pass any ... Law impairing the Obligation of Contracts...
So the government cannot interfere with contracts already entered into and, unless the government owns the company outright, cannot interfere with any future contracts between the company and the executive.
Also, private parties such as between banks and clients can agree to whatever terms they wish, but the Article I clearly states that the government cannot do the same.
Err, they're not interfering with contracts -- they're offering a contract. I agree it would be wrong for Congress to alter a contract between two parties, but that's not what's happening. They're offering a line of credit and the terms for that credit include some stipulations on executive pay.
Likewise, if you agree to accept unemployment benefits, there are strings attached to that too.
Surely you will concede that Congress has the right (obligation, really) to stipulate how taxpayer money is spent? That, by itself, is not a violation of anything.
The "contract" in TARP stipulates that Treasury purchase mortgage-back assets from financial institution in exchange for non-voting shares of the institution.
So not only salary are negotiated between company and management, two private parties, Treasury still do not have the right to "condition benefits on the nonassertion of rights".
Also, because the power to delegate TARP money was given to Treasury, something Napolitano also considered unconstitutional, and that the plan to cap executive salaries belongs to Obama, not Congress, Congress will have no role in setting these conditions.
So not only Congress do not have the right to make these stipulations, they're not even the ones doing the stipulating.
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[ 5.5 ms ] story [ 30.4 ms ] threadWe certainly can't presume that. These executives are their own employers, sit on each other's boards and grant themselves billions of dollars in cash and stock. That's part of the problem.
The point Napolitano is making that is unconstitutional for the government to ask an entity to surrender his constitutional rights in exchange for funding.
Just like the government cannot abridge free speech of welfare recipients or PBS.
It seems not unlike a bank granting you a loan, but only if you use the money for home repair.
So the government cannot interfere with contracts already entered into and, unless the government owns the company outright, cannot interfere with any future contracts between the company and the executive.
Also, private parties such as between banks and clients can agree to whatever terms they wish, but the Article I clearly states that the government cannot do the same.
Likewise, if you agree to accept unemployment benefits, there are strings attached to that too.
Surely you will concede that Congress has the right (obligation, really) to stipulate how taxpayer money is spent? That, by itself, is not a violation of anything.
So not only salary are negotiated between company and management, two private parties, Treasury still do not have the right to "condition benefits on the nonassertion of rights".
Also, because the power to delegate TARP money was given to Treasury, something Napolitano also considered unconstitutional, and that the plan to cap executive salaries belongs to Obama, not Congress, Congress will have no role in setting these conditions.
So not only Congress do not have the right to make these stipulations, they're not even the ones doing the stipulating.