June 24, 2009

We're From The Government

-- And we're here to help!

Citi has to raise salaries for retention, because of restrictions on bonuses. AP:

NEW YORK -- Citigroup Inc. is increasing base salaries for many of its employees as it restructures its compensation program amid new restrictions on bonus payments.

The increased salaries will offset lower bonuses, according to a person familiar with the matter who requested anonymity because the plans have not been made public. The higher salaries are not the equivalent of annual raises, the person added.

Citi faces restrictions on bonuses as part of a new government compensation oversight plan because the bank received bailout funds from the Treasury Department.

Of course, salaries are paid irrespective of personal or corporate performance, so this will be a drag on Citi's balance sheet and give the firm less flexibility to manage labor -- but at least there will be no embarrassing (to Congress) bonus stories.

Ahh, let's see, what can we fix next? Chairman Barney Frank has a great idea: lower the standards for Fannie and Freddie to underwrite Condo loans. What a brilliant idea. WSJ Ed Page:

Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity -- with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.

You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.- this is the kind of thinking we cant get in the provate sectpor. WSJ Ed Page:

Imagine what these people could to health care -- no, wait, you don't have to! They're already running the VA. Take it away, AP:
WASHINGTON -- The chairman of the Senate Veterans Affairs Committee is calling for more centralized control of the VA medical system after recent breakdowns in cleaning colonoscopy equipment exposed thousands of veterans to the risk of contracting HIV and other infections.

In prepared remarks to be delivered at a Wednesday hearing, Democratic Sen. Daniel Akaka of Hawaii said that disparities in quality control procedures at VA medical centers raise questions about whether local or national leaders are in charge.

Don't thank them -- it's all in a day's work for The Government!

We're from the government, and here to help. Posted by John Kranz at June 24, 2009 10:17 AM

There cannot be a better metaphor for government services to individuals than un-clean colonoscopy equipment.

Posted by: johngalt at June 24, 2009 2:44 PM

Touche, JG!

You get the coffee-spluttered-on-the-keyboard award for today.

Posted by: Boulder Refugee at June 24, 2009 4:27 PM

I salute you and bow to your wisdom, johngalt - that's a more fitting metaphor for the government than my DC train wreck example. You win.

Skipping lunch now...

Posted by: Keith at June 24, 2009 4:57 PM

Ahh, close enough for government work...

Remember, GOP, the choice is not between dirty and clean -- the choice is between dirty and virtual.

Posted by: jk at June 24, 2009 5:01 PM | What do you think? [4]