The Inquiring Manatee

That Big Pay Cut for Big-Bank Execs: Good Idea

    I reported many stories for USA TODAY on the Justice Department's 9/11 Victim Compensation Fund and its administrator, the experienced New York negotiations lawyer Kenneth Feinberg. He did a fine job. Now he's President Obama's executive-pay czar in connection with the Treasury Department's TARP bailouts of banking institutions. And again he's demonstrating an instinct for fairness as well as for politics.

    Feinberg today is imposing mandatory cuts amounting to 50% in the exorbitant compensation of top executives at the biggest financial institutions that have received taxpayer funds and have yet to pay the bailout money back. The move will strike a populist chord with a public that has been seething for months about the absurd and out-of-touch way these executives compensate themselves. The government may not be able to touch the insiders at Goldman Sachs and other firms not now covered by TARP; their billions in bonuses will continue to stick in the collective national craw. But taxpayers want to see the government asserting itself as the de facto owner of other giant institutions that royally screwed up their own balance sheets and the economy of the world.   

   It was amazing to see Sen. Mitch McConnell, the lemon-faced Kentuckian who's the top Senate Republican, endorse the compensation limits. If even Republicans are saying nice things about this obvious governmental intervention into free markets rather than denounce it as socialism, the political currents must be running mighty strongly against the fat paydays for the overweening incompetents of the financial world.

    Effective take-home cash at the TARP-dependent banks will now be limited to $500,000 a year (additional cash can be deferred) -- a munificent sum in the eyes of most earners, but chicken feed to Wall Street. Complicated new rules will restrict compensation in stock, too.
    Opponents of the new regulations say they will cause the most talented people at the TARP banks to jump ship for more money at the unregulated institutions. My answer is: What talented people? We're talking about the Masters of the Universe whose blind hubris ran their companies into bankruptcy or near-bankruptcy. Anybody who would hire these demonstrated losers is asking for trouble.
    Further, it's hard to identify sympathetically with professionals who have chosen a career of making money by, well, making money -- figuring out ever more arcane and allegedly ingenious ways for their institutions to invent profits, and taking a big cut of those profits in the form of bonuses, a corporate-jet lifestyle and multimillion-dollar salaries.
    What real value do any of these institutions add to the economy? What do they produce? Their money comes from other people with money, who go on to resell bizarre products to even more people with money until the ultimate consumers with the least money and sophistication buy these investment products and in many cases lose everything while the originators walk away laughing. 

    Try getting a real job and making something the world needs, guys. Meanwhile, as you labor on at $500,000 a year, try your best to make the living room rug in the Hamptons last another year.

Send This Man to Copenhagen

    

Wonderful, wonderful CO-penhagen, salty old queen of the sea!
                                                  -- "Hans Christian Andersen," The Movie

     If President Obama wants to go to Copenhagen to flog Chicago to the International Olympic Committee, let him go, says I.
     Those who criticize him for his decision -- they say it's unpresidential, it's too much like working for the "Illinois Chamber of Commerce," it risks having him look bad if Chicago loses -- are the same people who said he shouldn't even have dared to make a stay-in-school speech to America's children. Whatever Obama does or proposes, they're automatically against.
     Whether the 2016 Olympics end up in Chicago, Tokyo, Rio or Madrid, these carpers should be lined up in the stadium's javelin target area. Let the throwers heave at 'em.
      Now, personally, I think Rio deserves the Olympics more than Chicago does. No Olympics have ever been held in South America. And the Brazilians know how to throw a party, just as Chicagoans know how to rig an election.
     Oh, sure, there's lots of street crime in Rio, but how about Chicago, where a hapless teenager was beaten to death on the street the other day as a cellphone recorded the Third World scene? You want safety, go to Tokyo. Or maybe Madrid.
     But Chicago is Barack and Michelle's hometown, and if he's still thinking like the junior senator from Illinois that he was, it's hard to shake those habits. The benefits would not accrue merely to Chicago, moreover. It would be a patriotic plus for all Americans to snag another Summer Olympics, even though we had St. Louis in 1904, Los Angeles in 1932 and 1984, and Atlanta in 1996. We need something more to brag about these recessionary days.
     So bon voyage, President Obama. Come back with those quadrennial Games nailed to the wall. And if you don't succeed, you're still not likely to lose Illinois in 2012.

Same Sad Old Story: Guns With Violent Nuts Attached

    

First, two soldiers at a recruiting depot in Arkansas, shot by a convert to Islam. Then, Dr. George Tiller, gunned down in his church by a man who considers himself godly and acting for God. Today, a brave security guard killed at the U.S. Holocaust Museum by a vicious 88-year-old anti-Semite who once was a World War II hero but who has disgraced his Greatest Generation.
     Nobody in the United States is safe from unhinged haters. There are scores of thousands of them. They have severe mental issues. They are God-smacked or warped by a lifetime of losing and seeking scapegoats. They are armed to the teeth and lethal to anyone who gets in their way. A church vestry, a crowd of 2,000 in a public building. They don't care where they are. They come to shoot and kill.
    James Von (note the Von -- it's not even his real name) Brunn, the museum killer who was critically wounded in a shootout near the entrance, stalked in carrying a .22 rifle. He was a convicted felon, the kind of extremist who would attempt to kidnap members of the Federal Reserve Board at their meeting in 1981. Von Brunn should never have been allowed to own a firearm, but it is all too easy for anyone to buy one.
     Funny, Von Brunn reportedly was a frustrated artist. Just like Adolf Hitler, and without about Hitler's degree of talent. One the Holocaust organizer, the other a Holocaust denier. People like Von Brunn who blame Jews for their own failures are exactly like the Germans who turned to Hitler for the easy answers he provided. It is easier to hate than to work.
     We Americans are caught in a never-ending wave of murderous political crimes. Congress no longer has any stomach for gun control laws. The Second Amendment is on the march.
     We are sitting ducks. It may be your turn next. Wrong place, wrong time, you're gone.
     When are we going to do something about this reign of terror?  

A Modest Proposal on Guantanamo

    

As Republicans run wild on the issue of closing the Guantanamo Bay military prison and moving the 240 inmates to facilities on U.S. soil, even Senate Democrats can't be blamed for shying from President Obama's plan to remove this symbol of Bush administration high-handedness and torture.
      The NIMBY fears so easily stirred up by the entirely emotional issue, even though the detainees would be secured in Supermax federal lockups from which no one has ever escaped, have potentially vulnerable politicians running scared of a future opponent's simplistic 30-second commercials.
      But before Congress prevents the administration from moving anyone to the U.S. mainland from Guantanamo -- thereby making it virtually impossible to convince any other country to accept a detainee -- policymakers should consider an alternative that could be a win-win choice for everybody, except perhaps for the terror suspects.
      Want to gratify the rest of the world and frustrate jihadist propagandists by closing Guantanamo? Fine, go right ahead. Want to keep any Guantanamo prisoner out of any U.S. states? You can do that, too.
      The strategy: Relocate the prisoners to a high-security facility that would be newly built and opened in Guam, American Samoa or -- just a short flight from Guantanamo -- the U.S. Virgin Islands. (Quiet St. Croix, somewhat off the tourist track, has the most land. Just don't put the Muslims in Christiansted, the island's chief city.)
      All these potential prison sites have these advantages:
      -- They're on U.S. soil, so Obama won't have to back down on that point.
      -- Residents there have no votes in Congress, only nonvoting delegates.
      -- Building and operating the new prison would create local jobs, a prospect that could mute opposition from NIMPT (Not in My Palm Tree) forces. Some of those giant Samoans would make great prison guards after their careers as NFL linemen end.
      -- The locations are in tropical settings that beat the bleakness of tropical but barren and ugly Guantanamo. How could jihadists or European moralists object to housing prisoners in the balmy South Pacific, the North Pacific paradise of Guam or especially the lovely Virgin Islands? (There, the alleged terrorists would be getting a symbolic downpayment on the 78 virgins, or whatever the number is, that jihadi "martyrs" are promised in heaven.) Or the inmates could learn the Argentine tago in Pago Pago.* 
      The president's executive order to close Guantanamo by the end of 2010 would not be blocked. The detainees, whether tried by Obama's tweaked military commissions or detained Cheney-style without charges, at least would have more pleasant quarters under the American flag.
       So how about it, Mr. President and members of Congress? Try the American Territorial Solution to the Guantanamo dilemma.
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* That's a rhyme. Pago Pago, capital of American Samoa, is pronounced "Pango Pango."      
      

Cheer, Cheer for Old Notre Dame?

 Here's a commendation for the Rev. John I. Jenkins, president of the University of Notre Dame, for refusing to bow -- so far -- to mounting and near-hysterical pressure from anti-abortion Catholics to uninvite the pro-choice President Obama to deliver a commencement address at the South Bend, Ind., school on May 17.

   The local bishop says he won't attend. The Cardinal Newman Society, a national Catholic college group, says that more than 60,000 people have signed its online petition to stop the "scandal" at Notre Dame. The Pro-Life Action League is urging protests to Jenkins, demanding that he disinvite Obama. Social conservative student groups on campus are up in arms. Some of the Fighting Irish are wakening the echoes in fighting the nation's first African-American president, annoyed that he reversed the outrageously anti-progressive Bush administration restrictions on federal funding of embryonic stem cell research.

   The president is scheduled to speak at Notre Dame, Arizona State University and the U.S. Naval Academy in commencement season.

    Jenkins is admirably sticking to his guns. He told the campus newspaper that Obama is not being honored for his stands on abortion or embryonic stem cell research, but for his leadership in a difficult time. "You cannot change the world if you shun the people you want to persuade," he said. Jenkins issued a statement that Obama is "an inspiring leader" who is addressing the economy, two wars, health care, immigration and education "with intelligence, courage and honesty."

    Notre Dame's community and supporters should be proud that Obama is reaching out to American Catholics and honoring with his presence a university that for too long has been regarded only as a football school. Obama's address brings new prestige to Notre Dame, and everyone on campus should be open-minded about their differences with him.

   

Throwing Bonus AIGs at the Malfeasors

   

Sen. Chuck Grassley, R-Iowa, was being too kind to the AIG bonus-winners when he suggested in an Iowa radio interview Monday that they follow the Japanese model by bowing deeply, apologizing humbly and then either resigning or committing suicide.
    (The Japanese, by the way, describe the act as hara-kiri, not "harry-carry," as the American news media frequently mispronounce it. The ritual act of running a sword across one's midsection also is known as seppuku.)
    Why ask them to commit suicide? Why not take matters into our own hands by boiling these incompetent, greedy morons in oil? Or feeding them to the sharks off Isla Morada? Or parachuting them into the tribal areas of Pakistan?
    In truth, nothing is too bad for these AIG financial executives who have earned bonuses -- bonuses! -- of up to $1 million for running their huge company into the sewer, and taking the world's econony with it.
    No matter whether the taxpayers ever get the $165 million back -- and I favor a 91% special excise tax to be passed by Congress aimed squarely at these jerks -- let this become the death knell of the way the financial sector compensated its traders and managers. No more of this outrageous compensation. The people were helplessly angry and increasingly bitter for years as they witnessed these yearly bonuses and these stratospheric CEO salaries and options. Now, as owners of these companies, taxpayers aren't about to put up with a continuation of the status quo.
     These guys should be fired and perhaps prosecuted, certainly not rewarded.
     Enough.

Three Words of Advice for Dick Cheney

   

Former Vice President Dick Cheney is making a new career out of demanding that President Obama follow all of the Bush-Cheney administration's "war on terror" policies, saying that reverting to a law-enforcement approach from the post-9/11 "war on terror" militarism and torture is sure to engender new Al Qaeda attacks on U.S. soil.
    Is anyone even listening to this discredited man anymore? Secretive, power-grasping and arrogant, the man who instigated the illegal campaign to discredit Joe Wilson by striking at his wife, Valerie Plame, Cheney has been written off by a world delighted to be rid of him and his illiterate front man, George W. Bush.
    Bush and Cheney had eight long, miserable years to impose their policies -- from science-mocking religiosity to the needless war in Iraq to the regulatory lapses that led directly to the current recession. The American people, at long last, finally rejected these policies in toto last November.
    Yet Cheney is still chattering away. He just didn't get the message.
    It's time for a sick-and-tired world to give Cheney the same advice he so gracelessly gave Vermont's Democratic Sen. Patrick Leahy on the floor of the Senate:
    Go fuck yourself.

Swiss Cheesiness: Secret Bank Accounts Under Threat

   

On a day of riding Switzerland's crack trains around that small country in 1989, I stopped off to tour a little-known city called Zug, which means "train." I was astounded to see a skyline of modern office towers, an unknown New York in the Alps. What was going on?
    The buildings were there because Swiss banks were overflowing with money in secret bank accounts set up under Swiss laws for tax-evading Americans, kleptomanic African strongmen and Mexican drug bosses. The banks, paying little or no interest on this ill-gotten money or even charging the depositors for the convenience of keeping their stashes hidden, had to do something with the inflows. So they lent it out for the benefit of the prospering Swiss economy, building those towers to house all the lawyers dealing with the rich and secretive.
     What brings all this back to mind is a lawsuit announced by the U.S. Internal Revenue Service seeking to force the United Bank of Switzerland (UBS), Switzerland's biggest bank, to disgorge the names of 300,000 Americans allegedly dodging American taxes by maintaining those famous, numbered accounts.
     UBS had offered some concessions, paying a multimillion-dollar fine and yielding 300 names of big tax cheats to the feds, but doing even that much has enraged Swiss politicians and in turn much of the yodeling citizenry. All the Swiss are nationalistically up in arms over this attack on the foundations of their prosperity: their chosen profession as money-launderers for the world. And in other offshore tax havens such as the Cayman Islands, there's a lot of trembling these days. If the IRS gets its way, bank secrecy will be a thing of the past. To me and to other U.S. taxpayers, that would be a good thing.
     Public radio's "The World" program on Wednesday ran a voice-doctored interview with an anonymous American millionaire who acknowledged having placed $900,000 in a Swiss account (later moving the money among several other countries) to escape U.S. taxes. The guy didn't say so, but his nest egg might well have been amassed in an illegal way -- in pimping or illegal bookmaking or even kidnapping.
     Without regard to how such a sum was amassed in the first place, earnings on the money wouldn't necessarily be taxed in the U.S. Americans can avoid federal and state taxes on the earnings on their money simply by investing in state and municipal bonds, particularly those issued in their own states. So there would be no reason to hide money abroad, particularly at no interest or low interest, unless the money originally had been piled up by evading due taxes on it as it was being earned. These are bad guys who have been cheating their government for years. Now the government is coming after them, and hard, needing its revenue more than ever.
     If the Swiss lose the cachet of the term "Swiss banker," supposedly standing for probity and canniness, I won't mourn. On a 1964 trip around Switzerland on a Vespa motorscooter, I found the Swiss to be cold, money-grasping and inhospitable. After a hard morning on the scooter I stopped off for lunch at an outdoor cafe in Lucerne, overlooking the beautiful Lake Lucerne. I guess that as a road-grimy American student tourist I didn't meet the place's dress code, because the waiters resolutely refused to approach my table for 45 minutes until I got the message and left. I've never forgotten the snobbish snub. So don't ask me to feel sorry for the Swiss if their corrupt economic foundation crumbles.
     Taking some of the jobs from people in those bizarre Zug edifices would mean more jobs in the office buildings of America. We need that these days. Sorry, Zug.
     
     

    

Obama's Budget: Some Good Ideas

    

The $3.55-trillion budget proposed Thursday by President Obama shows his potential to be a great, activist president in the mold of Franklin Delano Roosevelt.
      Now all he has to do is get his ideas through a knotted Congress in the teeth of fierce lobbying by every powerful interest group you can think of, starting with health insurance companies, drug companies and private providers of student loans.
      Obama is saying that government should run government programs itself, not buck them to high-markup private firms at a cost of billions to the federal treasury. If Congress approves, Pell grants and other student loans would be handled by the Education Department, not by private firms, saving $4 billion a year. To free money for providing health coverage for more Americans, Medicare payments now going to private insurers under the so-called Medicare Advantage plans would be reduced. It's a move to the advantage of original, "straight" Medicare.
      Let me here talk up my own experience: Government gets a bad rap when it comes to the efficiency of Medicare. Medicare is not your local DMV office. Straight Medicare works well. You can go to any doctor that takes Medicare patients, and most do. Payments are made quickly to the doctors, and you get a report on what's been paid on your behalf so doctors can't readily bill the government for more services than they gave you. Co-pays are reasonable. The people you deal with on the phone at Medicare are really nice, as are the Social Security people.
      Medicare Advantage plans are garbage. They don't give you much more than straight Medicare, in many cases premiums are higher, and the comapanies get too much money from the goverment; Democrats have derided the plan for years as a giveaway to the private sector, done by Republicans who love the private sector dearly (and their campaign contributions).
      I signed up for a Medicare Advantage plan one year but later returned to straight Medicare. One problem: I couldn't find a Medicare Advantage plan that provided any coverage beyond California, my home state. When I spent summer weeks at a cottage my wife owns in Vermont, I had no medical coverage at all; I had to pay all bills out of my own pocket.
      I'd like to see the Medicare Advantage plans eliminated, but short of that, trimming their cost to the government would be a plus.
       And I'm shedding no tears for the student loan providers. Their profits have been enormous and their interest rates have been too high.
       A start on more health coverage, a modest growth for the Defense Department, new investments in energy and education: All these are great goals. My taxes are likely to go up under Obama's plans, but I am ready to pay them if this helps bring universal health coverage to the United States at last.
      It's up to the Obama administration to fill in details with line items, which will happen in a few months. Then it's up to Congress, especially its Democratic majorities, to follow the president's breathtakingly ambitious blueprint. 

Obama Acquits Himself Well in the House Chamber

    

What a pleasure it was to hear a smart, articulate president for a change as Barack Obama delivered his first address to a joint session of Congress last night. Call it the State of Obama speech.
      The president's performance accentuated that he is a stupendously good speaker, with a strong and reassuring voice. The first time I heard him, as an obscure Senate candidate running in Chicago in early 2004, he blew me away. And so it was again last night.
      Obama, I thought, struck just the right balance between grim realism and a confidence-restoring optimism as he explained the need for more spending to get us out of recession and then laid out his budget plans with their ambitious approach to energy, health care and education.
      He plainly listened to Bill Clinton's appeals to sound more optimistic. I doubt, however, that the speech will send Americans flocking back to the malls right away. We are in for more tough times. This is the equivalent, in Great Depression terms, of early 1930. The troubles have just begun. I can only hope that Ben Bernanke was right when he predicted recovery in 2010. There sure won't be any in 2009. But Obama's speech gave him some leeway with the public to continue to chip away with a highly partisanized Congress. Obama's popularity is high and will continue that way. He won't be blamed if times don't get better soon.