Treasury Secretary Is Cool With Firing Bank CEOs
Hey, bank CEOs! Need "exceptional" help from the U.S. Government? Get ready to be fired. Treasury Secretary Tim Geithner told "Face the Nation" that he was open to firing bank CEOs in much the same way that GM chief Rick Wagoner was recently shown the door.
Geithner told CBS:
"If in the future, banks need exceptional assistance in order to get through this, then we will make sure that assistance comes. Where that requires a change in management and the board, then we will do that."
Treasury Chief Says He's Open to Ousting Heads of Frail Banks [NYT]
[Face the Nation]
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Comments:
Sweeet... lets let the government hire THEIR CEOs, THEIR board and THEIR people ... I see people getting rich ... and I don't mean THE PEOPLE (for those that still don't get it, I mean the ordinary person ...)...
Just let Warren Buffet yell at them for a while. Or, let him control the companies and if they screw up, he'll cut them off.
"You think (insert company name here) is hemorrhaging now? Wait till we start controlling it!"
So is the government going to decide who fills the position once it has been "vacated"? If so, what is to stop the next bank CEO from being a top campaign contributor or some other cronie who is "owed a favor".
... OUT OF A HOWITZER CANNON INTO THE MARKET BUILDING!!!!
Yeah, he's cool alright. And I'm cool with losing thousands every time the f.ckstick opens his mouth.
more scapegoating and populist pandering. One person at the top of the heap does not singlehandedly destroy a business.
@flyboyJ: OUR ceo, OUR board and OUR people.
We own something like 80% of AIG. Why shouldn't we use that to leverage change in these organizations? To have gotten into the situation they must be poorly run.
I'm not saying we should let these companies be run by the court of public opinion, but we should take a long hard look and see if the current leaderships plans are actually viable or not.
@wgrune: Exactly... I also worry where's the line going to be drawn for the new found power the government is taking on in all this. I feel the shareholders in these PRIVATE companies are going to lose what little voice they had regarding management.
@WiglyWorm: To have gotten into the situation they must be poorly run.
Correct, and former CEO Martin Sullivan stepped down from AIG in June of last year.
So, if we give execs the boot, are they still entitled to their golden parachutes?
@flyboyJ: As opposed to keeping the people who failed in their job? In GMs case the number 2 guy took over. At the very least he sounds 1000 times smarter than wagoner. And he knows that there are no games now. He needs to stop worrying about the union and make a real plan that lets GM to survive. If GM gets a plan, it's directly related to the removal of wagoner. If GM still fails, well they tried.
@rpm773: God I know. I wish he'd seriously have to pay everyone back every time he opens his stupid mouth and the market becomes a blood bath. STOP THE POPULARIST PANDERING!
I can't wait for all thise senseless populist hysteria to backfire.
And it will. Don't even try the "oh but they took tax payer money" - do you get a mortgage write off or did you ever take out stafford student loans? Then you got a government bail out.
Please sign up immediately for your congressional hearing so Barney Frank can decide if you make too much money. And don't fly anything but coach on your trip to Washington for the hearing either - Congress might tax your income 90% for that or for any other reason they feel like.
Whose first? Or..whats that..I sense a double standard.
@flyboyJ: Like Obama campaigne advisor Franklin Raynes who made almost 100$ MILLION in the seven years before its collapse? No thanks.
@Corporate_guy: I am by no means saying keep the failed people in .. but just think about this .. The government is going to appoint the successors ... I would hope that it would be the #2 dude every time.. but about what so-in-so's nephew that wants a job and megerly meets the creditials needed .. or so-in-so's campaign something they "owe" .. It just leads down a road capable of bad to worse decisions ..
They should also allow interested banks to return the TARP money they have taken with interest if they don't want to have the government "helping" them any more.
Even now as the government is threatening to fire personnel and take all these actions, THEY are deciding IF they will allow the larger banks to return the money.
Correct, and former CEO Martin Sullivan stepped down from AIG in June of last year
Also correct. Now read the quote. They're not talking about re-sacking AIG's new CEO. They're saying "if your company needs assistance, be prepared to either step down or be fired if it is necessary".
What's the problem?
He starting to sound a bit like Hugo Chavez
@J Robert Dauphin: Has he yet done even one thing right? Seriously. Even one thing? I can't think of a single decision the guy has made that has turned out for the better.
When you can put a 5 year old in someone's place and the results are more or less of the same that's not a good sign.
Ahh, does anyone remember the good old days when it was Bush burning/shredding/trampling the Constitution? This shiat makes Bush look like Tommy Jefferson.
As a followup, If companies are in such bad shape -like AIG or GM- that they need the government to step in or Fail, then the company should know what comes next.
If the company accepted TARP funds because the government asked them to, to increase liquidity, then the company should be able to give the money back (with interest) without penalty.
Seriously, people. Can't even the LIBERALS see that this nationalization of private corporations is simply the first step to socialism, or worse, fascism?
Capitalism has worked WELL for a very long time. It turned our fledgling nation into an economic superpower in a time frame that's a fraction of the age of many nations we left in the dust.
We had a hiccup in the 30s. What we should be doing is learning from that. Instead, the liberals in Washington are using this as an excuse to pass spending measures that have been shot down for years. The stimulus packages are just the same damn spending bills that the dems have been trying to pass for decades, wrapped up in a nice new 'save the world' bow.
But we tried to spend ourselves out of the depression, and that failed miserably. Obama has even said 'We didn't do enough' back in the New Deal days, and he's followed that statement up with the most irresponsible, future debiting spending bills imaginable.
Capitalism works. We've proven it. Socialism doesn't. The USSR proved it. Why do you want to abandoned the principals our nation was founded on, simply because we hit a rough patch?
Beware, everyone, when the government seizes power. We're going to have a damn tough time getting it back.
This guy is a tool, thats the long and short of it. I wouldn't trust him with my change cup...
@WiglyWorm: "if your company needs assistance, be prepared to either step down or be fired if it is necessary." What's the problem.
The people whose actions or inactions led to new management to run to the Fed for money have already been removed. You're punishing the people cleaning up the mess.
CEO / Board / Upper Management salaries have officially been way overboard for the last 20 years or more. It's officially well past time to reign in the lunacy and stop the big wigs from looting the companies they work for.
@axiomatic: So, you actually believe firing a few CEOs and replacing them with government-approved surrogates will "reign in the lunacy and stop the big wigs from looting the companies they work for." Just want to make sure I'm reading you correctly. Then, I want to sell you a unicorn.
@Herbz: I think most agree, many of these CEOs aren't worth the leather in their chairs. It's about WHO gets to determine who stays and who goes.
@Shane Elliott: Then what justifies their 300x higher salaries? You've backed yourself into quite a rhetorical corner, there.
So the genius/$45,000 tax evader thinks CEOs who screw up and take money they're not morally entitled to should be canned. Good. Let's start with the clueless Treasury Secretary himself.
The people who masterminded the smooth transition to DTV and have ensured the financial health of Social Security are now going to hire private CEOs and provide health care for every person within our borders, legal or not. We will be part of the Third World within a decade. Maybe then China and India will export jobs here....
@sirellyn: Yup.
Along the same lines, when those firemen run up my stairs to put out the fire set by my neighbor who stored gasoline in his basement, I'm going to kick each one of them in the balls. Because it's all THEIR fault.
Look. You guys screwed up the global economy, you can't whine about the grown-ups that have to choose between the remaining few, crappy options that you guys have left us. Thanks for destroying the country. Now can you get out of the way and let us fix things? Thanks!
(ahem)
It's welcome. It's pretty damned amusing that so many Freepers want to reward the incompetence of the Wall Street CEOs and hand over billions of OUR money, no strings, to these guys. Sort of damned if he did, damned if he didn't situation, I suppose.
this kind of stuff is just maddening to me. the disconnect of DC and Main Street is growing huge. All the steps the FED and Geithner are taking greatly worry me.
I've got a feeling that foreclosures are about to go through the roof and we're going to see a lot of people just walking away from homes. Banks even.
And then I read stuff like this:
FDIC Watch: Agency’s Insurance Commitments 34% Higher than Reported
http://seekingalpha.com/article/129626-fdic-watch-agency-s-insurance-commitments-34-higher-than-reported
I think the best thing for the average American to do is to clear out as much of their debt as possible and put some savings away. Maybe even invest in some gold and silver too.
I’ve been watching the precious metal markets with the free widget ExactPrice ( http://www.learcapital.com/exactprice ) and both those metals are falling into some good price ranges I think for buying.
Whatever happens, it doesn’t look to me like we’re going to be able to avoid some big time inflation.
@morgasco: You're right... we should just let them fail. That way the shareholders will have nothing to complain about. Literally.
@Trai_Dep: The fact that the lifespan of a CEO is relatively short. It's a high risk, high reward job.
And instead of letting the consequences of bad bets gone wrong run its course, the government is in bed with big business. It's the definition of fascism.
And Geithner is one of the key players. He didn't see this coming at the NY Fed and brokered this fascist decisions. Now he's seeing the populist cries and Obama acolytes crying for the help and has to revert to nationalization. It's a scary path we've taken, and I'm nervous and anxious to see where we end up.
Thw way I look at it is that the execs who approved the stupidly unsound practices that got their companies and the American economy in this mess should be grateful that they merely lost their jobs and are not under criminal investigation.
@Murph1908: you're never going to make friends on this board with all that rational thinking and logic. it's better just to rush the corner office with torches.
@Trai_Dep: The guy at the top takes the blame for all the guys at the bottom. That's what he's there for. He's to ensure the people below him are correctly directing the people below them. It's a giant chain.
But, only the EXISTING CEO'S can save the company they helped ruin!
@craptastico: Slippery-slope arguments, partisan rhetoric, emotional invective, loaded language and a complete lack of any kind of empirical data cited constitutes "rational thinking and logic?"
@morgasco: They are private companies, we just happen to own a large enough share of their outstanding stock to tell them exactly what we want them to do. It's no different than if a person or company owned controlling shares of stock in a company. Murdoch appointed his son to help run fox. Was he the best person for the job? Probably not, but when you own a controlling share of the company, its good to be the king.
And the easiest answer of all is, if you don't want the government telling the banks what to do, then the banks should give/pay back all the money.
@Enkael: How big is the student loan program? How big is the bailout? Which has a greater impact on our economy? What would be the result if AIG went belly up, or citibank. What would be the result if 5 people with student loans couldn't pay.
Also are you suggesting everyone who signed up for student loans operated in fiscally irresponsible manner?
@Murph1908: You know that communism is far left and facism is far right, correct? You've got a bit of logical flaw there.
Actually, we had the hiccup in the 1920's. Remember the stock market crash due to unregulated capitalism. It's funny how so many people don't mention HOW the Great Depression happened, they just start with the premise that the New Deal made it worse (which it didn't- employment and GDP were rising dramtatically well before WWII).
REGULATED Capitalism works. Unregulated capitalism is found in many countries in Africa.
Don't want government in your business? Pay back the money and maintain appropriate capitalization.
@Ubik2501:
Typical liberal response. Broad claims about the fallacy of an argument, combined with devaluation buzz words, but containing even fewer arguments of substance.
I wonder if he is actually going to do something right! He reminds me of a crony but that was one of the smartest things I have heard from him so far.