ENDING SOCIALIZED CAPITALISM

Former Labor Secretary Robert Reich has an excellent idea for ending "creeping socialism" for the private sector that's occurring during the Bush administration. Responding to the bailouts proposed for Fannie Mae, Freddie Mac, and IndyMac, Reich suggests the following.

... When taxpayers insure a giant entity against loss -- as we now are with Freddie, Fannie, and Wall Street investment banks -- those entities must agree that:

(1) for the duration of the bailout, their top executives cannot receive total annual compensation higher than that received by the President of the United States, and

(2) the government gets five percent of their current valuation as shares of stock (roughly representing the benefit to their shareholders of the federal insurance) -- so that if and when the entities become profitable again, taxpayers are compensated for the risk they've taken on.

I would probably add another ...

(3) Money, salaries, and bonuses above and beyond what the President of the U.S. makes, from the 3 years prior to the bailout, must be paid back by the top executives.

My thinking is this: If the executives ran the company into the ground, Why should they be allowed to be compensated like corporate champions for doing so?

- Mark

P.S. The president makes $400,000 per year.