I support restrictions on the form of compensation in financial institutions, such as requiring them to be distributed in restricted stock that vests over several years (which is already standard practice at some banks, such as Goldman Sachs) and making bonuses in good years subject to clawbacks in bad years. But those restrictions have to apply to all financial institutions, not just some of them; otherwise, you get this situation where Bank of America is making a silly financial decision because it has to in order to hire a new CEO. (The fact that nobody will be CEO of America’s largest bank because of executive comp restrictions is another issue, but there’s not much we can do about that. I would do it, but I don’t want to move to Charlotte.)
In other news, Bruce Bartlett examines the stimulus' effect on unemployment and concludes that the stimulus was a good thing, but that it was foolish for the Obama Administration to throw around numbers as to what the unemployment rate would be with and without a stimulus back in March. He also concludes that the tax cuts that were included in the stimulus have had very little if any impact on the unemployment rate.
Indeed, one can argue that the failure of the stimulus to create or save more jobs occurred largely because Obama included too many non-stimulative tax cuts in the stimulus package. These tax cuts, such as the Making Work Pay Credit, accounted for more than 40% of the cost of the $787 billion stimulus package. Based on the CBO analysis, I don't think there is any question that the economy would be much worse off today if Republicans had gotten their wish and 100% of the stimulus had been in the form of tax cuts.
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