Will Obscene Compensation for a Few Kill the Bailout for the World?

Greed rules, at least in some quarters.

As Hell freezes over and I find myself in agreement with the Democrats on their additions to the Wall Street "bailout" (or "rescue," however you see it), the dark side of capitalism rears it's head: exorbitant pay for those at the top, most of whom are already multi-millionaires, and far too much risk fueled by greed.

The Dems want to add 5 things to the bailout:
1. Strong oversight
2. Assistance for homeowners facing foreclosure
3. The Government will receive equity stakes in the companies allowing themselves to be rescued by the government
4. Changes to bankruptcy law allowing judges to make changes to the terms of individual mortgages
5. Limits on executive compensation.

Note again that these terms would apply only to companies accessing the plan; this does not affect law in general.

In the same way as consumers must abide by contractual terms when borrowing large sums from a bank (think mortgage or car loan), so should the mismanaged Wall Street firms requiring assistance, lest they fail, be required to submit to terms. Face it, there's no such thing as a free lunch, but even with these terms, the companies with insolvent loans on their books are getting a great deal: they palm off the junk that's currently on their books, and move ahead - plenty of cash in hand - to rape and pillage once more. The only difference is that they will need sharper lawyers to find the new loopholes that will inevitably be in the plan.

I'm not a regulation kind of guy, but frankly, I feel it's only a start. And when you really think about it, it's good for the industry, because it will save them from themselves (their greed getting the better of them and causing this mess during the housing boom of the 2000s). However, as addenda to the bailout, which absolutely must come ASAP, it's reasonable. Treasury should just agree and move on with the plan.

Treasury Relents on Key Points - WSJ.com