Scraping By On $500,000 A Year

As I'm sure you know, President Obama recently instituted a salary cap of $500,000 per year for CEO's of some companies that will be bailed out by taxpayers. To most of us, "only" half a million dollars a year doesn't sound bad. However, it's a lot less than these CEOs are used to getting, so they can't be pleased. Some of them are bound to write letters explaining their outraged feelings to the President. Letters like this:

Dear President Obama:

It has come to my attention that you have decided to put a salary cap on some of us who will be receiving bailout money because of the current financial crisis. I applaud your effort to try to help the American economy, but I must object to this cap business. To cut my salary – and the salary of others in my position – down to $5,000,000 is absurd. We need a salary commensurate with ... wait a minute. My assistant just told me that I misread the figure and the limit is not $5,000,000, but $500,000. $500,000 a year? You must be joking.

$500,000 a year? Isn't that about how much teachers and firefighters make? And do they really contribute more to society than us fat cat bankers?

Something that people who are not in the financial world don't understand is that those of us who have an impact on the economy, need to be happy in order to do our best work. What makes us happy? Things. Things like private jets, boats, offices with Picassos on the wall, and a very modest private island in the South Pacific. $500,000 a year won't even pay the insurance for these things.

I have a lot of expenses that the general public doesn't know about. I set my wife up in a cute little store that loses about $60,000 every month. I don't just need to belong to one country club; I need to belong to a country club near each of my five homes. Front row seats are not cheap for basketball games, the opera, and ultimate fighting. If I don't sit in the front, I just don't enjoy the experience. Once I sat in the third row for a playoff game. I was so bummed out that the next day my bank lost $200,000,000.

Just between us guys, do you have any idea how expensive a mistress is? There are gifts, rent for her apartment, and singing lessons. I also have a private detective watching her because I think she might be cheating on me, and he's not cheap.

With all due respect, Mr. President, this plan, which would force CEOs to buy our suits off the rack, will be disastrous for our country. You talk about creating more jobs, but this will force many people out of work. With a salary of -- it's hard for me to even say it -- only $500,000 a year -- -- I won't be able to pay my chauffeur, the crew on my boat, and the woman who creates my personal aftershave. And am I supposed to toss out on the street the guy who takes care of my koi pond, my two year old's French tutor, and my chocolatier? God, I just love those confections.

I'm convinced that after you have read my letter, you will see the folly of your decision. Don't feel bad. Almost everybody makes mistakes. And isn't part of the "new politics" your being able to admit when you've been wrong? So, I thank you for your time.

If you're ever in New York, Beverly Hills, Deer Valley, Martha's Vineyard, or Liechtenstein, feel free to drop in on me.

Yours truly,

James "Trey" Harrington III

CEO Midwest Bank Trust and Mortgage

Well, I have to admit that Mr. Harrington does raise at least one good point: CEOs like him ran our economy into the ground when they had enormous salaries and perks. Just think how much worse they'll do if they're in a bad mood.

Greed: Not So Good

A question that many of us would love to have answered is, whatever happened to those original billions in Wall Street bailout money? Would we be wrong to say that some of that went down the toilet?

It's hard to remember since there have been so many plans, but wasn't the money from Bailout #1 supposed to help the banking and mortgage crisis? Well, have you or any of your neighbors felt that your mortgage problems have gotten better since the banks got this money? Or maybe they decided to help us another way: has your savings account interest gone up since they increased the amount of cash in their vaults? I don't think so.

F. Scott Fitzgerald famously said, "The rich are different from you and me." Ernest Hemingway replied, "Yes, they have more money." But now it's obvious that some of them also have more gall, chutzpah, ego, selfishness, and imported area rugs.

Like the rest of us, the wizards of Wall Street saw how foolish the Not So Big Three automaker heads were when they flaunted their luxurious ways by flying to Washington the first time in their private jets. Yet Citigroup didn't cancel the order for its new $50 million jet until it was pressured by the Obama administration. Now that it cancelled it, Citigroup might not get its deposit back. Do you feel as sorry for them as I do?

As billions flew into banking coffers courtesy of, well, us, millions flew right out of those coffers in the form of bonuses. That's right. Some bailed-out banks gave big bonuses to their bosses. I didn't watch every minute of the news during those early bailout days, but I don't think that's what the money was intended for.

Oh, there's something else that some of these greedy executives are -- clueless. What's missing in their brains that tells them it's okay for them to accept huge bonuses while others would consider it a bonus to just still have jobs?

Their rationalizations are succinct, but absurd. In the case of the GEO's (Greedy Executive Officers), they claim that their company needs to attract the best people to do the best job, and those people sometimes like to be pampered.

John Thain is an executive who liked to be pampered. The recently fired GEO of Merrill Lynch & Co., spent $1.2 million last year to renovate his office. His office. While he was at his very beautiful desk, his company gave out an undisclosed amount of bonuses. These bonuses were paid after, you may recall, Merrill Lynch was rescued by Bank Of America which was helped by – you guessed it, us.

But back to Thain's office. Among the things he had his company pay for were $87,000 area rugs, a $25,000 pedestal table, a $68,000 19th-century credenza, an $18,000 chair, a $16,000 custom coffee table, and a $35,000 antique commode. It wasn't even a new toilet, but the guy spent thirty-five grand for it.

Once Thain was caught with his pants down, he said that he would pay the money back to the company. He added that considering the times, this expensive redecorating was a mistake in judgment.

Hiring Thain was the real mistake in judgment. He wasn't just fired because of his extravagant office tastes. He was let go because while he was in charge, Merrill Lynch lost more than $15 billion in one quarter. That's $5 billion a month or about $166 million a day. If he put in an eight-hour workday, he lost about $21 million an hour, $346,000 a minute, or $5,787.04 a second. This business expert lost money probably faster than anyone can print it.

That's what's so aggravating about all this. These people who have been buying islands and giving their kids platinum pacifiers aren't necessarily geniuses. They are the same jerks that got us into the big financial mess in the first place.

Whoever came up with the idea of giving bonuses to people who do a bad job probably never filled up his car with gas by himself, never took out the garbage, and never uttered the words, "Is this going on sale soon?" If these people had done a great job, their desire for money and luxurious things wouldn't seem so absurd. Let's put it this way: if any of them had made a profit instead of a loss of $15 billion in the fourth quarter of last year, they'd deserve to have any kind of toilet they want in their office. But I still think that 19th-century credenza is a bit much.