Obama and CEO Pay: $500,000 for $1 Trillion

David Smick, author of The World is Curved, has this to say about Obama's executive compensation limits:

The important point:  The Administration is offering the bankers an implicit deal. Even though senior executives from banks receiving government assistance will face limits on their salaries, the value of their personal shareholdings – where for most executives the big money is – will be potentially restored as bank stocks rise in response to the bailout. In many cases, those shareholdings are now all but worthless paper.

The Administration needs this political cover because it faces a horrible choice. The issue:  The assigned price by the Treasury for the banks’ toxic assets in any bailout package that entails taxpayer funding. If officials value the toxic assets at too low a price, all bank stocks will collapse. The world would then declare the large U.S. banks insolvent. America would face financial Armageddon. On the other hand, valuing the toxic assets at an artificially high price (at the taxpayer’s expense) may save the banks but invites a political firestorm at a time when average folk are hurting. Thus the need for cover.