Obama gave a speech back in February wherein he laid out plans to cap the pay and bonuses of executives working for companies who received taxpayer-funded federal bailout money, noting that such executives could still receive compensation (like options) tied to the long-term health of the company. The move was in response to events like the AIG fiasco that occurred after the first round of Bush bailout money.
This week, the Federal Reserve “pay czar” Kenneth Feinberg – hired to oversee the companies who took the bailout money – issued a set of guidelines (The White House likes the term “formula” and “guidelines” better than “pay cap”) aimed to limit the pay at 7 firms who received the most bailout money. The White House ordered what’s being described as “drastic” pay cuts for 175 top executives at these companies, which are: AIG, Citigroup, Bank of America, GM, Chrysler, and the financing departments of the two automakers. However, it’s worth noting that the guidelines don’t specifically prohibit multi-million dollar paychecks or substantial deferred compensation.
Said Obama in a speech, “I’ve always believed that our system of free enterprise works best when it rewards hard work. But it does offend our values when executives of big financial firms — firms that are struggling — pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat.”
The Fed also noted that it would begin reviewing compensation practices at some our largest largest financial firms. In its guidelines the Fed stated, “Banking organizations too often rewarded employees for increasing the firm’s revenue or short-term profit without adequate recognition of the risks the employees’ activities posed to the firm.”
The Fed also noted that the hope is for other banking institutions to adopt the “pay cut model” in an effort to focus on long-term profitability and stability, rather than short-term cash.
Taking into account the outrage over the AIG bonus controversy and the unprecedented steps the government took to reverse them, along with the Obama salary caps for bailout company executives, it would seem that the Obama administration is indeed taking a hard line on the issue of insolvent organizations bonusing their employees on the taxpayer dime.
As U.S. Senator Russ Feingold (D-WI) said on the Senate floor last month when criticizing automatic bonuses: “These bonuses are paid every year, often without any public discussion or a recorded vote by those with the authority to approve or stop them. The people giving themselves these bonuses have made sure that they get them regardless of their performance.”
The House of Representatives, however, defeated this bill by avoiding a vote on it. Nor has either Congressional arm instituted an accountability system that rewards performance rather than tenure. Nancy Pelosi dodged the bullet issue by noting that Congress has “recognized the economic crisis” by voting to skip next year’s raise.
That the House is refusing to revisit their own automatic bonus program under an administration that has called for performance-based pay for both private-sector employees and teachers is particularly ironic given that the House is currently revisiting TARP-funded bonus legislation in response to the AIG fiasco, with statements like this one from Rep. Michael Arcuri (D-NY): “We will not sit idly by as money is being taken from the American people instead of being used to restore the confidence in this nation, as it was intended.”
Hmm. Is that so?
The legislation in question requires that all bonuses and incremental payments to employees of TARP-funded companies be doled out based on performance standards, which again shines a bright shiny light on the rather large (and bipartisan) elephant in the living room. Or, in this case, on the House floor.
Yesterday we talked about the AIG bonus controversy that’s causing a furor with the American people. Despite the fervent wishes of several men in expensive suits (notably Obama, Timothy Geithner, Edward Liddy and most especially Christopher Dodd), the American people are not willing to drop this topic quite yet.
Obama publicly took the blame for the fiasco with a “the buck stops with me” statement, while also pointing out that his administration was responsible neither for the lack of oversight that caused AIG to fail, nor for these bonuses being granted.
On Capitol Hill, AIG CEO Edward Liddy sat uncomfortably in a witness chair and lamely asked that any employees who received a bonus in excess of $100K please return it. Pretty please, with sugar on top? I’ll give you a gold star…
Dodd’s camp continued to deny that it was his amendment, right up until Christopher Dodd went on Wolf Blitzer to try to talk himself out of being held responsible for what CNN was already calling “The Dodd Amendment.” This made for very entertaining televsion viewing, as Chris Dodd gave an interview trying to distance himself from the amendment while CNN scrolled news of “The Dodd Amendment” below him.
Dodd then copped to maybe possibly adding some language that could have maybe caused these loopholes… but only because Geithner made him do it. To be fair, some reports are now saying that the actual loophole that permits the AIG bonuses was in fact tacked onto the Dodd Amendment at the request of the Treasury Department. The game of Whodunit isn’t over, and it isn’t pretty.
“We wrote the language in the bill, the deal with bonuses, golden parachutes, excessive executive compensation that was adopted unanimously by the United States Senate in the stimulus bill. But for that language, there would have been no language to deal with this at all.”
The baffling weakness of that statement coupled with the elaborate tap dance he’s done to try to deny ownership of “The Dodd Amendment” has earned Chris Dodd a second Fantasy T-Wearer Award today, with the They Made Me Do It T-shirt above.
UPDATE: The House passed a bill to recoup bonuses at 90% paid to any employee, making in excess of $250,000, who was bonused by any company getting $5 billion or more from the government bailout program (the Troubled Assets Relief Program, or TARP). The matter now falls to the Senate.
Oh, AIG. Go sit in the corner. Again. Preferably without a masseuse and a glass of taxpayer-afforded lemon-infused mineral water.
AIG first upset American taxpayers and Barack Obama when the failing company decided to treat its employees to a posh spa weekend the day after it received $85 billion of taxpayer-funded federal bailout money. At the time the campaigning Obama brought up this misuse of taxpayer money in the debates, noting that these executives should be fired and that the cost of the trip should be reimbursed to the Treasury.
Despite assurances by now-President Obama that the $787 billion stimulus package would be free of pork barrel spending and special-interest earmarks, and despite his assurances that executives in bailed-out companies wouldn’t be rewarded for failure, the stimulus package was signed into law with an executive compensation amendment tacked on by (the newly-outraged) Chris Dodd. Dodd had clashed with the President on the issue of executive compensation after Obama announced his executive salary cap; but news of Dodd’s amendment and AIG’s embodiment of it has caused a massive public outcry, and Dodd is now looking at ways to tax the bonuses.
Dodd’s stimulus package amendment allows for contractually obligated bonuses agreed on before Feb. 11, 2009. This means AIG was able to spend $165M in bonuses for top executives – including 11 top execs who took their $1 million+ “retention bonuses” and walked out the door with them.
How this amendment escaped the notice of the President, the Treasury Secretary and members of Congress who are outraged by this news is a good question. The simple answer is most likely that giving people less than 24 hours to read a complicated 1100 page spending bill is just not enough time for anyone to read and understand it, even the guy sitting in the Oval Office. Perhaps a Cliff’s Notes version would have been of value…
Obama and other members of Congress are predictably outraged, and the President has instructed Treasury Secretary Timothy Geithner to “pursue every single legal avenue” to undo the bonuses. Geithner is now saying that the $165 million will be deducted from the $30 billion that the company is due to receive as part of their bailout package. But this solution doesn’t work for people who want those that recieved the bonuses to have some sort of personal accountability in the matter, hence certain members of Congress looking for ways to tax the bonuses up to 98%.
Obama also announced that he’s putting the kabash on cash bonuses, noting that any future bonuses will have to be paid in stock that can’t be cashed out until the government loans are paid. And just to be Grinchy about things, he’s demanding that these companies make public “all the perks and luxuries bestowed upon senior executives, and provide an explanation to taxpayers and to shareholders as to why these expenses are justified.”
No word on whether the employees of AIG have submitted doctor’s notes about needing massages and golf games to alleviate the stress of working for a financially insolvent company.
Obama describes this move as “basic common sense.” This phrase is slightly different than, say, words that have been applied to the $25 million bonus package for Peter Kraus. Kraus received this bonus for the whole 3 months he spent at the failing Merrill Lynch before it was “bought out” by Bank of America, who in turn went to the federal government for bailout money to help with troubled assets. Like the ones they just bought from Merrill Lynch.
The best summation of Lynch’s package is: “The master bedroom suite is a private sanctuary on the corner of the apartment with two windows overlooking Park Avenue and a fourth wood burning fireplace.“ Which is of course why living on Park Avenue is expensive. In this case, Kraus’ new bonus-funded digs cost over $30 million.
Well, perhaps it’s nice to know that at least one American citizen is able to afford a new house despite being briefly out of a job.
Obama’s mandate was met with criticism from some Wall Street pundits who claim it will make it difficult for troubled firms to retain top executives. Others have noted that, were these executives doing a job worthy of 7 and 8 figure bonuses, perhaps their companies wouldn’t be failing in the first place. Obama himself noted that American citizens are rightfully upset at seeing top executives be “rewarded for failure.” And indeed, a simple search of our catalogue would indicate that Americans are fed up with the way the bailout money has been managed.
And so we award two Fantasy T-Wearer Awards today: the first is the “Good to be a Banksta” T-shirt above, which really does make a nice housewarming gift for Peter Kraus. And the second is the “Bah, Humbug!” T-shirt at left, which goes to Treasury Secretary Timothy Geithner in the hopes that his lighthearted wardrobe choice might lead some affected executives to turn those frowns upside-down.
It may not seem like a Vice Presidential candidate has a lot in common with a local plumber and a teenage vampire, but then again this was a year of surprises. Sarah Palin, Ron Paul, Joe the Plumber and Edward Cullen showed the kind of impact that can be made when the everyman appeal hits home.
Sarah Palin
John McCain’s surprise pick of Alaska Governor Sarah Palin as his running mate spurred a Republican resurgence of energy and a national media frenzy. As Palin fascination grew, the t-shirts came pouring in – Palin actually unseated Obama for a time in the t-shirt primary, thus proving that a Bible-and-Gun-totin’ Hockey Mom could inspire more than her party members. Sarah Palin had a lot of nicknames and colloquiallisms applied to her that lent themselves naturally to merchandise, and many of them had to do with animals – not entirely inappropriate, given that she hails from the bucolic state of Alaska. She was the Cougar, the Barracuda (and the Sarahcuda), the Moose-Hunter, Caribou Barbie and the Pit Bull with Lipstick. She was also the Maverick (and used the term liberally to describe both her and McCain), the Hockey Mom, the MILF and the VPILF.
Given her unabashed love of hunting, guns and her religion, it wasn’t surprising to see strong opinions on both sides of the political fence about Sarah Palin. The religious right embraced her as the All-American poster girl and portrayed her as the anti-Obama; liberals and feminists, insulted at the implied assumption that women would vote along gender lines rather than on political issues, decried her as inexperienced and anti-feminist and accused McCain of pandering to the 18 million voters who had chosen Hillary Clinton in the Democratic primaries.
It seemed that everything Palin did was worthy of a headline, most notably any homespun gaffes she might make in front of a camera. But when Palin spoke, people listened. From her noting Alaska’s proximity to Russia as foreign policy experience to her performance in the debates, Sarah Palin was someone who’s every word (and choice of accessory) was discussed and debated – and, very often, committed to the almighty t-shirt. In the end, Palin’s newsworthiness was unable to knock Obama out of the minds of American voters on election day. But in the short time she was in the public eye, Sarah Palin managed to put Wasilla, Alaska on the World Map. (It’s up by Canada, kinda next to Russia.)
Ron Paul
Republican Congressman Ron Paul burst onto the 2008 election scene Howard Dean-style. Using the Internet as his canvassing ground, he amassed millions of supporters (The “Ron Paul Revolution“) who viewed the Republican Presidential Candidate from Lake Jackson, Texas as a heroic, no-nonsense, common-sense-talking anti-Bush. Though a Libertarian at heart, Ron Paul has been open about the necessity of running for public office as a Republican in order to have a viable shot at Congress and the Presidency. He is openly critical about President Bush and his administration, particularly as relates to the Iraq war and Bush big government straying from intrinsic Republican values.
Without the money to buy quality airtime and with the cameras aimed elsewhere, Ron Paul used the Internet and in-person speaking engagements to spread his message. His dedication to his ideals and the massive online support he amassed did get people to stand up and take notice, though ultimately – like Dean before him – he was unable to transfer his online popularity into real-world votes. Still, though, Ron Paul made a name for himself as an honest-to-a-fault public servant who stays true to his beliefs and his constituents, and he was the first candidate in the 2008 election to harness the power of the internet to mobilize his message and his supporters.
Joe the Plumber
Joe the Plumber (known as Joe Wurzelbacher by those who can pronounce it)made a name for himself during the third Presidential debate. Better said, John McCain made a name for him (namely, Joe the Plumber), mentioning Joe 21 times. Obama was good for 5 mentions, for a grand total of 26 mentions for Joe the Plumber. By contrast, Iraq came up 6 times and the economy was mentioned 16 times. Joe far outshone mention of Sarah Palin and Joe Biden as well. Not surprisingly, we saw Joe the Plumber designs hit the system mid-debate and within a few hours Joe had about 1/4 the content of all plumber designs.
Joe became an unlikely hero for the McCain campaign after having a discussion with Obama on the campaign trail about the Illinois Senator’s proposed tax plan. McCain used Joe as an example of a hardworking American (dare we say Joe Six Pack?) who would pay more taxes under the Obama plan. The Obama/Joe conversation was recorded by cameras; the uncut version ends with Obama noting that chatting with Joe was good debate prep:
As it turns out, Joe the Plumber doesn’t actually make $250,000 a year; it seems he was simply concerned about the principle behind Obama’s plan. Despite being made an instant celebrity thanks to McCain, Joe initially wouldn’t endorse either candidate and went on-record that he was keeping his vote private.
His vote was kept private for 12 days, at which point he jumped on the bus and hit the campaign trail with John McCain. In the meantime, Joe was made an instant celebrity and unlikely political pundit, being interviewed as a symbol of the everyman by everyone from Katie Couric to Mike Huckabee. Local television stations around the country scrambled to find their own Joe the Plumber (my own local station used Eduardo the Electrician – yes, really), but none could match the t-shirt worthiness of the actual Joe the Plumber.
As is the case with so many relationships rushed into by two people who barely know each other, the McCain/Wurzelbacher romance hit the rocks a couple weeks later over McCain’s support of the Paulson bailout plan. While Wurzelbacher now says he was “appalled” by McCain at that point and considered moving out (read: getting off the bus), he reconsidered due to their mutual desire to move the Arizona Senator into more modest accommodations in Washington, D.C..
With the election over, Joe has found a place for himself on conservative talk radio and television; he also has a book deal in the works. When all is said and done, Joe the Plumber will go down as someone who took his 15 minutes of fame and ran with it. (Er… or rode a bus with it.)
Edward Cullen
If you haven’t heard of the small town of Forks, Washington or its sparkly resident Edward Cullen, chances are that you don’t have a teenage girl in the house. The real town of Forks is the setting for Stephenie Meyers’ “Twilight” book series, which portrays a love story between teenagers Bella (a mortal and recent transplant to Forks) and Edward Cullen (vampire, baseball player and Forks resident).
The hit book series was optioned by Hollywood, and the first “Twilight” movie hit theaters on November 21st to rave fan reviews. Before the movie opened, the “Twilight” folks did something for their fans that’s a rarity in Hollywood: they gave them permission to make “Twilight” merchandise.
Given the avid fan base of “Twilight,” we looked forward to seeing creative, inspired designs – and we weren’t disappointed. Twilight t-shirts immediately filled the fan portal to the tune of almost 450,000 Twilight products as of this writing, and motivated fans were able to wear their own creations – and those of other fans – to the opening night showing.
While Edward Cullen himself is by far the most popular character in the land of t-shirt fandom, there’s also a wide variety of shirts celebrating Bella, Jacob and the story itself. All in all, it’s been a real treat to see the enthusiasm and creativity that “Twilight” enthusiasts have demonstrated over the past few months.
So what would Edward wear? Well, we think he’d find something.
As mentioned in Part I of our 2008 retrospective series, this was a year of ups and downs for America. From politics to the economy, the sudden changes engendered a virtual case of whiplash as tides turned on a dime and fortunes were reversed on Main Street, Wall Street, and at seemingly unlikely location of the local gas pump.
Gay Marriage / Prop 8
In May of 2008, the California Supreme Court overturned the gay marriage ban, noting that the fundamental “right to marry” extended to same-sex couples equally. While gay couples around the country celebrated a stride in the name of equal rights, opponents of gay marriage scrambled to introduce an initiative to the November ballot in order to alter the California State Constitution, thus deeming same-sex marriage unconstitutional.
Thousands of gay couples, many of whom had waited years to have their unions legalized, rushed out between May and November to tie the knot under the law of California. All in all, over 10,000 couples were married in the three months following the May ruling – more than were married in the first four years after Massachusetts legalized gay marriage.
The battle over Prop 8 was touch-and-go down to the wire. The measure passed by a margin of 4%, leading gay marriage and equal rights proponents to a series of post-election protests. Supporters of a repeal will argue about the Proposition being unconstitutional, and that it violates the separation of Church and State; those who passed the measure will argue that the will of the people is the final word. This argument is of course far from over; on November 19th, the California Supreme Court accepted three lawsuits challenging Proposition 8.
Since the May ruling and the subsequent November election, we saw a flurry of gay marriage, equal rights and Prop 8 t-shirts be created and bought as folks decided to voice their opinions in a more public manner than the ballot box. Of course, California wasn’t the only state to have anti-gay marriage initiatives on their November ballots; Florida and Arizona passed similar laws, and Arkansas passed a measure to prevent gay couples from adopting children.
What the future holds for gay couples and their rights is uncertain, and at this point it seems that it’ll take a lot of time, lawyers and money to determine it. One thing’s for sure: when religion and civil rights clash as a political issue, there is never an easy solution.
Wall Street Bailout(s)
Early in 2008, we saw a troubled mortgage industry lead way to some bank failures and dramatic government bailouts. Bear Stearns was the first to make headlines, but it most certainly wasn’t the last. By early September, Fannie Mae and Freddie Mac were taken over by the government. By mid-September the government bailed out AIG, which showed its gratitude by treating executives to a $440,000 corporate retreat a week later.
Around the time that AIG executives were golfing and hitting the sauna, Treasury Secretary Henry Paulson announced his plan for a taxpayer-funded bailout of Wall Street so that We the People could foot the bill for AIG’s $25K in spa treatments. The plan allowed him to spend $700 billion in taxpayer money without any oversight, and was met with raised eyebrows by much of the American public and political leaders.
While political pundits had managed to avoid head-on discussion of the financial crisis for previous 6 months by arguing back and forth on semantics as to whether or not this kind of action (i.e. the Bear Stearns rescue) was a “bailout,” those days were over. It was bailout time, and Paulson warned that the time was now.
Well, all of those things added up were and are a recipe for the aforementioned collective sigh on behalf of the American people. As well as a whole lotta t-shirts.
The original bailout plan was rejected. It’s worth noting that the CEO’s didn’t do themselves any favors by using private jets for their trip to D.C.. Likewise, when Ford CEO Alan Mullaly was asked whether he’d accept $1 for a salary (down from his $666,667 salary – yes, that’s the real number, so it’s a good thing he wasn’t asked to subtract $1), his smarmy “I think I’m fine where I’m at” response didn’t exactly endear him or his cause to the members of Congress or to the American taxpayers.
So the CEO’s went back to the drawing board (read: Detroit), and returned again a few weeks later in hybrid vehicles to ask for their money again. Despite 2 of them putting the corporate jets on the auction block, this time they wanted $34 billion. But they weren’t asking for a “bailout.” No, no. They just wanted a “bridge loan.”
The Big 3 have made a lot of promises, including a focus on more fuel-efficient vehicles. And that leads us to our last topic…
Gas Prices
Until very recently, gas prices were a major sticking point with American drivers throughout 2008. As prices continued to climb, Americans watched in disbelief with hope that the worst would be over soon. With President Bush apparently asleep at the wheel and without a roadmap to put an end to the seemingly non-stop price hike, drivers were left with 2 choices: grin and bear it, or find alternate solutions.
During the summer travel season gas was up to $4.00/gallon and up – which is to say that gas prices had moved beyond an annoying inconvenience and into a travel barrier. Some folks, looking for productive ways to deal with the gas price crunch, channelled their frustration into creativity.
While gas prices have dropped since the election brought in a new President who’s already assembled the key players in his energy team, the robust collection of gas price t-shirts will forever serve as a reminder of a time when beer by the keg was cheaper than gas in some places.
With all the talk of the election, the debates, the economy, the bailout, and AIG taking their $85 billion dollar taxpayer-funded bailout as permission to spend $440,000 on a corporate retreat complete with $23,000 in spa treatments for its executives, it’s understandable that many of us just haven’t had the time to think about what we want to be for Halloween.
Palin made headlines by accessorizing with a canvas tote that reads “Real Women Hunt Moose.” It’s of note that this bag is the usual canvas, reusable type of tote bag used instead of plastic bags by the eco-conscious at the grocery store; no word as to whether Palin’s bag was filled with groceries, moose meat (is that a grocery item or a field win?) or was simply a gift from Jessica Simpson.
In any case, Palin’s bag reminds us that Halloween is coming up, and we have a few suggestions for those of you who want to be a pit bull sans lipstick/hockey mom/barracuda/Wasilla resident this year. Whether you think the costume is fun *or scary, we can accessorize your Palin Halloween for you. The content, as ever, is up to you.
7) If you really want to get into the spirit there’s a variety of accessories that you can tote along with you. A fake hunting rifle is the most obvious, but we really like this inflatable moose head as well.
And if you want to do a group costume, you can always have a friend or two dress up as moose and go running from you. We even have shirts for the moose.
So don’t fret – your Halloween costume is just a few shopping carts away from being relevant, fun and something that doesn’t require too much goopy makeup. (Just don’t forget your lipstick.)
Obama gave a speech back in February wherein he laid out plans to cap the pay and bonuses of executives working for companies who received taxpayer-funded federal bailout money, noting that such executives could still receive compensation (like options) tied to the long-term health of the company. The move was in response to events like the AIG fiasco that occurred after the first round of Bush bailout money.
Said Obama in a speech, “I’ve always believed that our system of free enterprise works best when it rewards hard work. But it does offend our values when executives of big financial firms — firms that are struggling — pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat.”
