Rep. Sherman Squares Off With Pro-Wall Street CNBC Host
On CNBC this morning, host Mark Haines -- who is catching heat this morning for arguing that Wall Street can't "be run well" by anyone making under $250,000 -- was at it again defending the need for high executive bonuses in order to keep Wall Street running.
But Haines' interviewee, Rep. Brad Sherman (D-CA), pushed right back at the host's conspicuously pro-Wall Street line.
When Sherman observed that "most people on Main Street do not" agree that AIG can't be put into government receivership (an assertion supported by recent polling on nationalization), Haines replied: "And what do the people on Main Street know about running a financial system?"
To which Sherman quipped: "What do AIG executives know about running a financial system? They only know how to destroy one."
Video of the exchange is below, and a full transcript is posted after the jump.
HAINES: It does not go far enough, sir?SHERMAN: Absolutely -- it doesn't deal with the Merrill Lynch bonuses, since they were paid in December, and worse than that it doesn't deal with million-dollar-a-month salaries. More importantly, we should have AIG in receivership, they should've been put in receivership months ago, and we would have saved tens of billions of dollars. We wouldn't see tens of billions going to the richest on Wall Street, and overseas -- and of course, these bonus contracts would have been voided. We need receivership, and we need limits on salaries as well as bonuses.
HAINES: Well, receivership ... I think most people agree, that would have caused some systemic problems.
SHERMAN: Most people on Wall Street agree. But most people on Main Street do not.
HAINES: And what do the people on Main Street know about running a financial system?
SHERMAN: What do AIG executives know about running a financial system? [crosstalk] They only know how to destroy one.
HAINES: This is witch-huntery. I'll be perfectly honest with you.
SHERMAN: We don't have to hunt the witches. We know who they are.
HAINES: You and people who share your opinions seem to think, you know, let's hold salaries on Wall Street to $100,000. Do you have any idea what Wall Street would look like if you do that?
SHERMAN: Well, first of all, I wouldn't set the limit at $100,000.
HAINES: Well, whatever. $250[,000]. All the business would go -- all the business would go overseas, that's the bottom line.
SHERMAN: Obama's position is $500,000 plus unlimited restricted stock. That's where I'm at as well, although I was actually at a higher level before Obama's statement. But for you to assume that Wall Street is acting in the national interest flies in the face of recent reality.
Josh
Elana
Matt
Eric
what a smug hack.
i predicted obama would take the hit for this stuff.
and unless he changes his wall street over the main street attitude his presidency will be short lived and a total disaster.
the outrage you see now is only a drop in the bucket of what is to come.
why?
cause these bailouts are not over.
the transfer of wealth is only half way complete and the people wont sit still for anymore and these banks and corporate theives want more!
March 20, 2009 1:19 PM | Reply | Permalink
Ex-squeeze me?
I like what Obama said yesterday. He'd rather do the right things over four years than placate people (like you?) over eight.
There is no reason to coddle these people who ran the economy into the ground. The fucked up, and no one can say they didn't do it consciously, so now they have to be brought back under control.
Them's the breaks.
March 20, 2009 1:33 PM | Reply | Permalink
Smug hack? Which one?
As for your prediction, yesterday, and today?
Today's Gallup
For the click impaired: 62 - 27. Unchanged from yesterday. We're now day 5 and counting since the bonus revelation.
"His presidency will be short-lived and a total disaster". You mean shorter than 4 years?
March 20, 2009 1:35 PM | Reply | Permalink
I may have misunderstood what you wrote, so we may be in agreement on things. If so, I apologize. But your rant was a little unfocused so I'd only ask that you elaborate on what you meant.
March 20, 2009 1:37 PM | Reply | Permalink
Well, well, well. If it isn't the "Obama will be in the 40s" troll again. You post nonsense and then cowardly run off. Meanwhile, there is some good news for you: The Repubs approval ratings are absolutely dismal!
March 20, 2009 2:56 PM | Reply | Permalink
Smug hack? Try bullshitter.
As for your attack on Obama: when you know what you're talking about, let's hear it. Until then, sit down and STFU.
March 23, 2009 5:53 PM | Reply | Permalink
Elana, I assume you live in the NYC tristate area so you know as well as anyone that $250K per annum around may give you a decent living, but does not make you rich. Hell, two police officers working for the Suffolk County police force out on eastern Long Island can easily make $250K a year between them with modest overtime (I think there salaries top out in the low $100,000s). I really don't think people think of police officers when they think or the "super wealthy". So you, Josh, David Kurtz and the gang should stop the populist BS and explain to us who in their right minds that has the competence would take on the task of doing work-outs, unwinds, etc. of billions of dollars of assets and expect to make $250K except if they were already independently wealthy.
March 20, 2009 1:42 PM | Reply | Permalink
Going from the "low 100s" (let's say $125K) to $250K is essentially doubling a salary. Hardly possible with "modest overtime". And wasn't the LEGISLATOR in the clip is talking $500K not $250K - why did you choose to debate to the hack's number?
Oh shit ... glad I reread ... you said 2 men could earn this amount not only working full time - but overtime. So these people are worth MORE THAN TWICE AS MUCH as someone who risks their lives to keep the rich-ass fuckers from being robbed??? No, wait, you're saying that it's an insult to ask them to work for more than twice as much as a cop can make working way longer hours ... being shot at.
That's the most fucked up argument for giving the financial sector million-dollar salaries I've ever heard.
March 20, 2009 3:24 PM | Reply | Permalink
What if we made it so the Wall St. execs were getting shot at? Would the salaries be comparable then?
I think we could find some people to arrange that.
</pure_snark>
March 20, 2009 4:04 PM | Reply | Permalink
They'd still be overpaid -- for being not only fuck-ups but also being shot at based upon their being fuck-ups.
Clue for Wall Street defenders: fuck-ups don't deserve having jobs, let alone being paid.
March 23, 2009 6:00 PM | Reply | Permalink
$250k/yr, here in Suffolk Co, is either a)rich, or b)poor, depending on where in Suffolk you live.
Most of Western Suffolk, that's rich. $70-80k/yr will let you get by w/a house and a car if you're careful, $120k comfortably. Some parts of Huntington and Islip, $250k/yr will feel like you're barely keeping up with Joneses, but those Joneses are worth millions. And out in the Hamptons, or Montauk... well, if you live there year round, $250k/yr is mega-rich, and if you own one of the estates out there and only vacation out there (or you're Billy Joel), $250k/yr means you haven't actually worked that year.
As for those two cops? The Suffolk Co. Police Dept is one of the highest-paid in the country, and for the most part, does jack-all to earn it. That's part of why the Suffolk Co. Sherrif's Dept has been trying to get a similar payscale - they do the actual damned work, as do Corrections officers.
March 21, 2009 12:26 PM | Reply | Permalink
We aren't talking about the police force. We're talking about persons who appear to be financial illiterates.
Competence does not begin at a minimum pay rate. As is obvious, if $250,000 equaled competence, then millions per month should equal "God".
And we're talking about "retention bonuses" not only for incompetents, but also for those who left rather than be retained.
Defending nonsense only makes you look stoopid.
March 23, 2009 5:57 PM | Reply | Permalink
The idea of compensation through stock is a good one. If you own the company you have much more of a vested interest in managing and limiting risk. You don't just take the money and run, you invest in the future. Bonuses need to be tied to results, not just sales of financial instruments, but the real, tangible, long-term growth of those financial instruments.
March 20, 2009 1:58 PM | Reply | Permalink
I'm sorry to see this. I've always consdered Haines to be one of the less wingnutty of the CNBC people. Clearly, I have been mistaken.
March 20, 2009 2:16 PM | Reply | Permalink
I don't know: isn't he less wingnutty than Santelli and Cramer?
March 23, 2009 6:02 PM | Reply | Permalink
Ben Sherman is now my hero (at least for the day).
March 20, 2009 2:31 PM | Reply | Permalink
WRT Executive pay limits, Europe is moving in the same direction
http://dealbook.blogs.nytimes.com/2009/03/20/regulators-worldwide-scrutinize-bankers-pay/
March 20, 2009 2:34 PM | Reply | Permalink
Go Rep. Brad Sherman!!!! You speak for many of us - Thank You!!!
His very valid point was $250,000 a year - is all they should get until the Companies are profitable again - and the US Taxpayers are paid back. Plus these Execs made bundles of millions in the last few years to hold them over. So what if they have to sell one of their Five homes.
Call or send Thanks to Rep. Sherman - we need more like him to demonstrate how stupid people like Haines and others on CNBC are.
http://bradsherman.house.gov/sherman/contact/
March 20, 2009 2:44 PM | Reply | Permalink
What other industry on the planet would we still see people still rushing to fellate the employees that caused such destruction, as if they're some kind of gods?
You know, when Joseph Hazelwood got drunk and spilled 53 million gallons of oil in Alaska, I don't remember anyone saying, "Whoa, hey now, we can't fire this guy. Do you know how hard it is to captain a tanker? We need this guy!"
March 20, 2009 3:10 PM | Reply | Permalink
Sorry, to the Sherman applauders, but they're both being smug hacks. Just because they're opposed to each other doesn't make one of them right.
"Main Street" doesn't know any more about what needs to be done about problems in the financial markets than they knew about Saddam's involvement in 9/11. After 9/11, even when you explained to them that Iraq had nothing to do with the attacks and, indeed, Baathism and Talibanism were diametrically opposed ideologies, "Main Street" shrugged its shoulders and said "ahhhh, who cares? You know they're all in it together." I must have heard that a thousand times. No clear idea who "they" were and what "it" was, but that was enough to endorse killing tens of thousands because they were scared.
Well, "Main Street" is scared once again and once again looking for justice from a vaguely defined "them." Forgive me if I decline to climb on the bandwagon with them. I do confess that I'm kind of surprised how many people who spent most of 2000 -2008 castigating them for their stupidity are now praising them for their wisdom.
And yeah, the CNBC asshat is wrong too, but that's too easy, like saying "water is wet." The overweeing arrogance and sense of entitlement and illusion of mastery that these guys still have is a major source of the problem. If rich people had displayed the arrogant defiance in 1930 that they are today, FDR would not have been able to forestall a bloody revolution.
March 20, 2009 3:14 PM | Reply | Permalink
But Sherman is clearly less wrong!
You did not begin to make the case that Sherman was being a hack, much less a smug hat. Flesh out your label. I see Sherman doing a very nice job of speaking truth to power in that interview.
March 20, 2009 4:16 PM | Reply | Permalink
Exactly. It's all too easy to say "a plague on both their houses." Although it's true that the fact that they're opposed doesn't make one of them right, the content of the argument makes one more right than the other.
March 20, 2009 6:44 PM | Reply | Permalink
All this populist yapping may be satisfying, and as much as the next guy I'd love to see all of these CEO's in handcuffs, but let's not be stupid: Mark Haines is right.
Yes, Wall Street CEO's don't need to make tens of millions per year, but $250K for overseeing firms of this size is ridiculous.
Sherman's cute quips, implying that any man on the street can run a bank -- are as idiotic as anything out of the mouth of Michelle Bachmann or Eric Cantor.
March 20, 2009 4:48 PM | Reply | Permalink
No, $250,000 is plenty for any job. If they cannot handle it, perhaps it is a job for more than one person? If they do not want it, perhaps they ought to find something they enjoy doing rather than looking employment based on their wages?
It is not like the shareholders were actually getting any value for their hundreds of millions.
It is all just money invented, pulled out of thin air to be given to those who understand the game and for those who do not to pay with their real resources or labour.
March 21, 2009 7:19 AM | Reply | Permalink
@ age is just a number:
Your analogy only holds up if the cops you are talking about have been hired to solve crimes they themselves have committed.
So, it's not worth any Wall Streeter's time to "unwind" these deals if they're only making $250k? Maybe they'll reconsider - if the alternative is going to jail.
These criminals have a lot of nerve. Fuck them. We don't negotiate with terrorists. Let 'em blow up the world's financial system. We'll survive. It's better than knuckling under to terrorists.
March 20, 2009 5:05 PM | Reply | Permalink
Marc Haines is trying to confuse the issue by conflating "bonuses" with "salary". This is my understanding and I would appreciate any corrections. Isn't it true that these Wall St financial firms pay reduced salaries and rely heavily on bonuses because bonuses are taxed at a lower rate than salaries? Otherwise employees would get bigger salaries, and bonuses would not be a regular standard occurrence (only those who earn a bonus would receive one, which is reasonable and none of these people would have earned one for destroying their company). Mark Haines is speaking as if Obama et al. are limiting salaries and I believe the current discussion is about limiting bonuses(Of course the salaries these guys get is mind boggling, but that is not the current issue). The Main St complaint is that in any world that makes sense, a bonus is given to someone who excels at his/her job, not someone who destroy companies and the livelihoods of millions. We have no idea what the salaries of these "bonus earners" is/was but there needs to be a little clarity here, and it won't come from CNBC or Rushbo.
March 20, 2009 5:10 PM | Reply | Permalink
I love the notion that if these people are paid less than $1M per year they will leave the country and go work elsewhere. First, as pointed out by the Representative in the video, good riddance. More importantly, however, is the question of where they are going to go? What banker/finance manager type in his or her right mind would quit a job now? Maybe it's our civic duty to pay taxes so that these folks can make as much in a year as I expect to make in my entire working career as a teacher. Given that, they surely will spend the money and stimulate the economy, right? Perhaps, once they are making more they'll pay their employees more, trickle down economics!
Oh yeah, captains of finance, after you've quit your jobs because of poor pay, I've got a hot job tip for you. I hear that the carwash down the street is hiring now that spring has rolled around...
March 21, 2009 8:22 AM | Reply | Permalink
As someone who makes less than the 500,000/year + stock bonuses quoted by the talkshow host (but for some reason not picked up on the thread itself), but more than the 250,000/year quoted by the talkshow hack - I can say that anyone whining about those salaries is nuts. Overinflated salaries drove inflation in real-estate on both costs for the last 2 decades - and was as much of the housing bubble as anything else. As physicians, lawyers, engineers, professors, and other professionals watched their salaries eclipsed by people who added no value to the economy - and as Ivy leaguers realized that they could not afford to buy a house unless they became a no value added hack - the professions have suffered.
The very people who supposedly are the only ones who can run a large company have been the only generation to fail to aim our investments such that there is real growth. No real growth for a decade = abject failure; similar uber capitalists in the 1950-60s happily made 5 times the salary of an average worker. The only similar decades for salary disparities that I can find are the 1920s and 1890s... both of which ended in catostrophic depressions.
So - if someone finds that they can't manage a company for 500,000 a year (more than 10x the median household income) + stock... I don't really know what to say.
March 22, 2009 9:49 PM | Reply | Permalink
I know what to say:
"You're fired!"
Or, in other words,
"You're unretained!"
March 23, 2009 6:09 PM | Reply | Permalink
Wooo, scary "populist yapping", oh noes! It's as horrifying for some to contemplate as "socialized medicine" or "progressive tax rates".
I'm amused to see there are people naive enough to believe that no one would fill these jobs for $50K per annum plus unlimited performance-triggered stock bonuses. After all, these types are just your garden variety gamblers at heart. Unemployment is high, and Atlantic City is crawling with them. There'd be a line around the block!
The idea that the existing charlatans have some sort of special competence is laughable, and as the Congressman noted, disproven by recent history.
March 21, 2009 7:56 PM | Reply | Permalink
I know, let's peg CEO pay to the salary of the President of the United States. Certainly no one can argue that running a firm on Wall STreet is harder than running the United States?
March 22, 2009 8:35 PM | Reply | Permalink
Be careful: you're dragging in reality!
March 23, 2009 6:11 PM | Reply | Permalink
Kudos to Rep.Brad Sherman. I do think he hurt Mark Haines' feelings, though.
March 23, 2009 1:24 PM | Reply | Permalink
The real problem here is not how much money the people who run banks and brokerages and the other citadels of money make; it is the reality that we have an international financial system is ruled over by a relatively few people who, for a generation have been doing their thing with little-to-no oversight.
When Ronald Reagan opened up the Pandora's Box called deregulation I predicted that the resultant mess would not be cleared up until the economy fell back to the way it had been when all of those supposedly-unnecessary regulations were imposed in the first place.
As with any other institution, lack of oversight and regulation in the financial sector led inevitably to abuse, which led to malfeasance which led to an economic meltdown not seen since Herbert Hoover decided that the best way to get things moving in the right direction was to let the market rule.
If stockholder oversight actually worked AIG and others would have never taken the actions they took but most stockholders know no more about day-to-day operations of financial systems than anyone else, besides as long as they got their dividends there was no need to look carefully at how their profits were made.
The media is no good for oversight; to do his or her job financial sector reporters have to have sources and those sources are not there unless coverage is not favorable.
Banks should be banks, insurance companies should be insurance companies, auditors should be independent and the whole thing has to be watched by a government staffed by people who understand the process in detail
March 23, 2009 3:37 PM | Reply | Permalink