Economist Dean Baker (Beat the Press, 8/9/09) sees the Washington Post as simply “keeping with its strict editorial policy of only letting others tell readers what ‘populists’ think,” when publishing its August 9 “front-page article on setting executive compensation at banks receiving bailout money”–one which “never presented the views of an actual populist.”
Instead, Baker writes “readers got to see the comment of Robert Profusek, a lawyer at Jones Day who is identified as having advised major banks on compensation matters,” and Linda Rappaport, “head of the executive compensation practice at the firm Shearman & Sterling”–both of whom unsurprisingly argue for maintaining high executive pay in order to attract “talent” that will “make the money for the shareholders.”
Baker voices the unspoken aspects of this assertion:
If the Post had solicited the views of a populist, or an economist, they might have told readers that much of what the banks earn comes directly at the expense of consumers and businesses….
The public has no obvious interest in subsidizing traders to speculate in financial markets. If the speculators win, then the loans that Goldman and the others receive will be repaid, but this repayment will only be a portion of the higher prices paid by consumers and lower profits earned by producers as a result of Goldman’s speculation.
And, “moving beyond the world of speculation,” Baker doubts that “if most of these individuals were replaced by the person next in line…the bank’s profits would suffer in any big way.” Which means that “these high salaries are just a drain on the bank, its shareholders and the taxpayers. But you won’t see this argument presented in the Post.”
Listen to the FAIR radio show CounterSpin: “Robert Johnson on AIG Bonuses” (3/20/09).