Actually the NYT told readers that: "U.S. officials appear wary of doing anything that could cause an exodus of executives and further damage fragile companies — and add to the taxpayers’ burden." Of course the point is that the NYT does not know why U.S. officials (i.e.. top officials in the Obama administration and powerful members of Congress) are not interested in serious measures to limit compensation of bank executives. All it knows is what these officials say publicly. However, it is engaging in journalistic malpractice by presenting this as truth. Frankly, it is difficult to believe that these officials could be that worried that limits of pay for top executives would "damage fragile companies and add to the taxpayers burden." Any moron can figure out how to make money by borrowing from the Fed at almost no cost and then buying government bonds or government insured bonds that pay 3.5 percent to 4.5 percent. It really shouldn't be necessary to pay someone millions of dollars, or even tens of millions of dollars to pull that one off. Also, the correlation between pay and the quality of performance is not that strong. The top executives at the Wall Street banks, who were pulling in tens of millions of dollars a year in pay and bonuses, drove these banks to the edge of bankruptcy or beyond. There is no obvious reason to believe that this clique has become a better judge of "talent" in the last year. Given the known evidence, it seems far more likely that the "U.S. officials" are motivated by deference to large campaign contributors than any concerns for the public good.
--Dean Baker
