Editorial #1: Executive Payback

The editorial I got from the Washington Post, “Executive Payback”, comments on how banks are giving bonuses to executives from money received through government bailouts. Billions of dollars of taxpayer money is being gifted to top executives to “attract and retain talent at a time when [banks] need it more than ever.” Normally, Americans wouldn’t care how much money companies are giving in bonuses to executives, but when it involves money that comes out of their wallets, it’s something else. President Barack Obama seems to see this issue, deciding to put a cap of $500,000 on total yearly pay and on stock gains. The author of the editorial explains that perhaps a large bulk of money going to these people is one cause of the present failing economy. However, this government regulation may cause “market distortions and unintended negative consequences.” Though dealing with the economy is the most important issue right now, President Obama should find some kind of long-term solution to make up for any possible consequences.

I agree that the huge bonuses being given to executive heads in banks with or even without taxpayer money is ridiculous. Rather than rewarding these “talented workers” with even more money than the millions they’re making already, the companies should focus on getting back on track. If they were so worried about keeping their jobs, companies can act more responsibly and use that money saved for when they might be thinking about laying off jobs. Sacrificing a couple hundred thousand in bonuses to save their jobs shouldn’t be too painful. However, I disagree that this government regulation in executive pay is going to have serious negative effects on the market. Executive pay probably could have made up for more than half the billions of dollars banks asked for from the government in the bailouts. I realize most people hate to give up their money, but if taxpayers can pay for billions in dollars of bailout money, then surely our wealthy executives can live without some.

Also, it isn’t a guarantee that by giving away bonuses, there is a promise a strong circulation or boost to our sagging economy. If annual salary can go beyond $500,000, bonuses can reach into the millions. With our middle class and lower middle class toiling to make payments and keep food on the table, the nation’s economy is struggling just as well. Businesses need consumers, and if the consumers have no job or no money left in their wallets, businesses will tumble. The millions of dollars given away in bonuses could have been added to the billions of dollars in stimulus plans to get money back to taxpayers even if it’s only a hundred or so dollars each. I think now is not the time to be greedy and act vulnerable, big businesses hoping to stay alive need to focus on trying to fine a solution instead of begging for more money.