Posted by
Contrarian Guitarist on Saturday, December 02, 2006 4:25:18 PM
I saw Barney Franks last night on PBS's Nightly Business Report (
full transcript here). Starting in January he will chair the House Financial Services Committee. He is somewhat vague on CEO pay...
"I don't think the government should be telling people what to pay. I think the shareholders should. The point I would make is this. With regard to CEO in particular, I do not think the boards of directors work as effective independent checks. They are not the fox guarding the hen house. They are the hens guarding the rooster. And I think the time has come to say we need the shareholders to do this. What we're proposing is not one size fits all, one uniform rule. We're saying let the people who own those companies go for it. It seems to me a distinctly non-radical idea."This is a perceived golden goose for the Democrats. A populist concern. And yet, "distinctly non-radical". Careful what you ask for. When shareholders are ask about CEO salaries, they generally endorse the existing compensation by voting to retain the Boards. If it were up to me, the CEO's of companies I own would be paid as much as posible so as to attract the best of the best.
Barney's top priority?
"Affordable housing is the single biggest one. We have a terrible housing crisis in this country and I think we now understand that housing is not simply a social good, but it's an economic practice (ph). The biggest difference people will see when we take over from the Republicans is we will reverse their policy of basically letting any affordable housing stock dwindle and not building any new stock."Affordable housing? "Terrible housing crisis"? Isn't home ownership at an all-time high? Isn't minority home ownership also at an all-time high? As the speculators start getting upside down on their many adjustable mortgages we might actually see a glut of affordable homes. Is $1500 for a
home in Detroit affordable? Is this really going to be the top concern of the Financial Services Committee?
When asked about the "grand bargain", Barney shows who's
backpocket he is in.
"The business community, which has been in control pointedly (ph) for a long time with its allies has blocked our efforts to do anything about equity. They've frustrated the National Labor Relations Act."And here comes
Universal Healthcare...
"I want to say to the business community, look, help us get health care out of the workplace and have a good universal health care system. Let people join unions without being harassed (INAUDIBLE). Raise the minimum wage. Help more people get higher education partly through public spending."...am the only one who remembers that fear of Universal Healthcare was part of what drove the Republicans to power in 1994?
I don't really have a lot of confidence in Barney's ability to understand economics, let alone manage an expanding economy. Time will tell.