"A Modest Proposal"
Dean Baker has ideas for some fetters congress might want to put on the bailout package:
The government can set whatever conditions it wants on participating in the reverse auctions. One of the conditions it should set is that executive compensation be severely constrained at any financial firm that participates. For example, it can set an absolute limit of $2 million in total compensation for any executive at any firm that takes parts in the reverse auction.
Since participation in the auction is completely voluntary, this would make the cap voluntary. Furthermore, there need be little fear about losing good talent, because well-managed firms would not have to participate in the reverse auction.
It turns out not to be the case that the Chinese character for “crisis” is formed by combining the characters for “danger” and “opportunity.” Nonetheless, people always repeat that idea because it’s genuinely insightful. This financial crisis is a great opportunity for progressives to gain some leverage over a set of economic problems that it’s normally difficult to devise a workable method of addressing. I’m not holding my breath out for congress to make the most they could out of this opportunity, but for the moment progressives out to be drawing attention to the fact that the opportunity exists.