Hostile Media

President Trump gripes that the fake-news’ constant nipping at his heels is impeding what he can get done. This may or may not be the case. And by this I mean just the “nipping” not the “fake news.”

Let’s be real ... the deep state and most of the hostile media hate Trump with a white-hot passion. Although this makes his job much more difficult ... in a way, it is a good thing ... for it requires him to perform well in every situation .... like in the current COVID-19  outbreak.

In the heat of the moment, it is difficult to gauge how well he is handling this health crisis, but, to me, I think he is managing this crisis almost as well as possible. Sure, he has made a few missteps. But, like any good manager, he is driven not by ideology, but to produce results and can pivot on a dime to do so.

When the national media is in love with a president, like with our former “chosen one,” gigantic mistakes are not focused on nor corrected ... in fact they are résumé enhancers ... such as Obamacare, the rise of “ISIL,” the Iran nuclear deal, the Paris Climate Accord, the swine flu response, TARP and the Afghanistan “surge” among many other Obama boners.

So, dear reader, although our national media is grossly biased and dishonest, they may be performing a useful purpose ... keeping Trump walking the line ... and will likely give themselves lots of kudos for such.

The Camel’s Nose

The House of Representatives this past week overwhelmingly passed a 90% income tax on bonus compensation for executives earning over $250,000 per year and working for companies receiving over $5 billion in TARP or other bailout monies. This includes companies like AIG, Fannie Mae, Freddie Mac, and possibly Citigroup and Merrill Lynch (now part of Bank of America). And, in the process, Congress is ignoring the thousand fold bigger issue of how these TARP and other bailout monies are being distributed. See my blog Golden Goldman).

Although I think this was misguided legislation and may be mollified in the Senate, still executive pay packages have been soaring into the stratosphere in recent years primarily, I believe, because the checks on such largess have all but disappeared. Company shareholders are now mostly mutual funds, hedge funds, and other amalgams of monies whose investment time horizon are very short and whose managers themselves have been caught up in the frenzy of mega-salaries. (When I was an investment analyst on Wall Street in the 1970s, a top pay package for this profession was a few hundred thousand dollars … now, for essentially the same work, it is many millions.)

So, into center stage steps President Obama who is now proposing to limit the pay packages of all corporate America independent of whether any government monies have been given to them. (See Executive Pay Limits). Now while I don’t take issue with the need to reestablish some sanity into the executive pay process, I do question if the Federal Government in the form of Chris Dodd and Barney Frank have the expertise and disposition to be the arbiters of this process. In fact such a development downright frightens me. The AIG executive bonuses uproar has allowed the nose of the government camel into the tent of corporate governance which, if I read the Obama administration’s intentions correctly, will be just the first of a series of baby steps with the ultimate objective of dismantling capitalism.

The road to Socialism is paved with camel’s noses.

Skin the Cat

Goldman Sachs is now making loans to its cash-strapped employees. See: Goldman Loans. This, most likely, is in response to the public outrage that has arisen over the bonuses that AIG recently gave to many of its managers. Like AIG, Goldman was also a recipient of taxpayer largess to the tune of $10 billion of TARP funds last fall PLUS a $12.9 billion pass-through of taxpayer funds from AIG (which I wrote about in my previous blog post). This loan program pretty much substitutes for what would be standard bonuses at Goldman. Instead, it is loaning its employees the money necessary to meet their internal capital calls.

Now the rub … I would be willing to bet a good steak dinner that many of these “loans” will be eventually forgiven by Goldman. Thus they effectively will turn out to be retroactive bonuses without the pejorative label. (And this legerdemain also allows recipients to defer income taxes on these payments.) So you see … there is more than one way to skin a taxpayer.