ABC’s Jake Tapper covers an interesting proposition from Republican Senator Bob Corker on financial reform for Wall Street — he wants a “clawback provision” forcing failed executives who have driven companies into the red to give back their earnings for the past five years. Loving it!!!
Read how Austan Goolsbee, one of Obama’s chief economic advisors, tiptoes, avoids and runs away from this idea!!
CORKER: There is no question, and I think that first of all, I plan to offer changes to this resolution authority that say that, if a large entity like this has to go through this resolution where in essence they’re liquidated in an orderly way, I think that everything that the executive team and the board members have earned through this company over the last five years needs to be clawed back. In other words, there needs to be some penalties assessed to the management that have caused the country to have to go through this orderly liquidation process. So absolutely, I will be offering an amendment that deals with that, so that we’re taking back, we’re clawing back all the earnings that management has made out of this firm, if it has to go through orderly liquidation. I think that’s very appropriate, and certainly I’m going to be doing that on the floor if it doesn’t make
it into the base bill.
TAPPER: Austan, can the White House get behind that clawback
provision? Are you being out-populisted by Republicans?
GOOLSBEE: Well, look, in the bill now — the president went to
Cooper Union this last week to revisit the spot where more than two
years ago, he went and said we need to have fundamental reform–
TAPPER: But there is no clawback in this bill?
GOOLSBEE: There is a requirement that they’re all fired. If you
get to that point, all the management is fired–
TAPPER: So they take their $500 million to their home in the Hamptons.
GOOLSBEE: — all the shareholders are wiped out. Well, look, as I say, on any details, we’re open to looking at negotiating the details of how we carry out the president’s principles. But if negotiation — and Senator Corker, to his credit, is not in this camp — but if the negotiators are going to come forward more as a delaying tactic and we’re just going to put in hundreds of amendments and try to keep this going so as to stall, delay and kill reform, that’s not going to happen. This is going to pass.
Um. No. It’s not a delaying tactic. But since we saw in the case of Goldman Sachs that they were betting on the market crashing and profiting by our losses, we need to find some way to put the fear of God into these jerks so that they do not try to profit by playing Ponzi schemes with our dough. Corker’s idea is just one way to make sure we have leglsiation with teeth.
Whether Senator Corker is just doing some populist-type posturing or not, the point is made — if we don’t have accountability in this reform bill and, as Dem. Senator Sherrod Brown discussed earlier, a way to overcome this “too big to fail” debacle, any reform falling short of tackling those two concerns effectively is meaningless.
What do you think would be fitting punishment for irresponsible and dishonest Wall Street sharks? I have a feeling I know the answer!