Augusta Chronicle Editorial Staff
President Obama has begun going after the excesses of capitalism.
He announced this week a $500,000 cap on the salaries of CEOs of companies that receive federal rescue money.
We don't know how much the federal government can or should inject itself into corporate boardrooms. Frankly, it's more than a little disconcerting when an American president starts issuing salary caps in the private sector. And you don't want to chase off the best talent, either.
But you know what? We're right with him in spirit.
The excesses in corporate compensation and perks, especially by firms receiving emergency government money, have not only given capitalism a bad name, but they've driven this country to the brink of socialism.
Horror stories continue to come out almost weekly about companies that have already received bailout money from taxpayers, only to give out huge bonuses to executives, to sponsor extravagant events and to schedule lavish trips to resort destinations.
Bank of America, a recipient of bailout money, had a five-day party and hosted the "NFL Experience" outside the Super Bowl in Tampa. Wells Fargo planned an upcoming getaway for mortgage officers at some very nice Las Vegas hotels/casinos. But after a congressional and public uproar, the bank canceled the trip.
Bank of America, stung by criticism of its Super Bowl soiree, announced this week it is canceling all employee incentive trips for the time being. The bank received $25 billion in tax money last year.
Wall Street firms doled out $18 billion in bonuses alone last year, despite the economic collapse.
One CEO whose firm was laying off people famously spent $1.2 million on refurbishing his office and attached potty.
Such excesses may be the shareholders' business any other time. But when a company receives tax bailout money, it becomes our business.
Again, we wonder how well equipped a government in a free-market republic is to curb the excesses of capitalism -- and whether we even should want it to try.
So, we are left with this question: Why are the capitalists content to sit back and watch the government try to rescue capitalism?
When are the CEOs going to step forward and do their part to help the economy?
To their credit, some CEOs already have stepped up. Several of the Big Three auto company CEOs, for example, agreed to a $1 annual salary.
Why don't the rest of these folks taking home $5 million, $15 million, even $50 million announce that they're 1) cutting their pay by half or more and 2) using that money to hire as many workers as they can find work for?
Imagine the psychological effect alone on a country battered by rising unemployment, home foreclosures and the desperation of previously hardworking families that today don't know where their next meal is coming from.
It might also have a significant stimulative effect -- if more people have more money to spend, and more job security, the country's commerce could get going again.
Only the capitalists can save capitalism. But they will have to want to.
In the process, they could help the country out of the doldrums and set a powerful example.
How much do these folks really need to live on? Twenty million? Fifty?
From outlandish pay for CEOs of failing companies that have been laying good workers off, to the bonuses and trips and perks that bailed-out firms have been caught spending money on, the excesses of capitalism are to the point of being immoral.
The onus is on them, not on the president, to change the way things are.
