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5 CEOs Who Are Worth Their Fat Paychecks
Tweet Share on Facebook December 2, 2009 Comment (15)The average American can be excused for thinking that CEOs raid companies rather than running them.
What was once the most august job title in working America has become a synonym for greed and chutzpah. In recent years, the chief executives of Bear Stearns, Lehman Brothers, AIG, Citigroup, Fannie Mae, and Freddie Mac ran their companies into the ground while collecting pay packages that totaled eight and sometimes even nine figures. Some CEO perks sound like the trappings of royalty: car and driver, family use of private jets, personal security, lavish death benefits for family members, free tax and retirement-planning services. While CEO pay has drifted down on account of the recession, it still averages about $1.7 million, and the gap between the pay of CEOs and average workers has been widening for years.
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4 Economic Moves the Government Got Right
Tweet Share on Facebook December 1, 2009 Comment (8)Back in early May, the stock market looked as though it had rebounded from the depressing lows it had reached in March, but stocks still seesawed as investors vacillated between hope that the worst was behind and fear that nasty surprises still lay ahead. Then on May 7, the Federal Reserve released the results of its "stress tests" of the nation's 19 biggest banks. They showed that half were healthy, most of the rest would be OK if they raised reasonable amounts of capital, and only two or three were really in bad shape.
The markets yawned. On CNBC and Fox News, critics of the Fed rolled their eyes. Some said the Fed's methodology was too soft, others said its analysis was a whitewash that hid catastrophic problems at the banks. But over the next few weeks, that attitude changed as most banks raised the required capital, investors gained confidence, and a huge rally in financial stocks led the strongest bull market in decades.
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A Lesson From AIG: How to Fix the Fed
Tweet Share on Facebook December 1, 2009 Comment (16)Of all the villains responsible for the Great Economic Wipeout, the Federal Reserve is pretty far down the list. It's certainly behind members of Congress who deregulated the banks in 1999, allowing once staid institutions to gamble recklessly. Then there are notorious CEOs like Martin Sullivan of AIG, Angelo Mozilo of Countrywide Financial, and Richard Fuld of Lehman Brothers whose greed and hubris wrecked their companies. Crooked mortgage brokers, rapacious Wall Street traders, and millions of irresponsible homeowners were key supporting actors in the revolting drama, too.
The Federal Reserve made one unambiguous mistake: It kept interest rates too low for too long after the 2001 recession, in the forlorn belief that Wall Street money hounds would exercise restraint instead of getting drunk on cheap money and heading to the casino. The Fed also could have spotted the housing bubble sooner than it did and acted more quickly to deflate it. And once the financial system was in full meltdown in 2008, the Fed arguably could have done a better job managing the collateral damage.
