Congressional bloodlust

Posted by Marc Hodak on August 24, 2009 under Irrationality, Politics, Reporting on pay | Comments are off for this article

Kenneth Feinberg is contemplating the serious issue of whether or not to disclose the names and compensation of the highly paid executives whose pay he is reviewing.  On the one hand, there are personal privacy and security issues:

“One of my clients makes $25 million a year and drives a Honda,” said Eckhaus, of Katten Muchin Rosenman LLP. “He tries to lead a fairly modest life and he would be horrified if what he makes appeared in the paper. Not only would his neighbors know, but his kids would know, and it would affect his ability to raise his kids. These are people, not a circus sideshow.”

Douglas Elliott, a former JPMorgan investment banker now with the Brookings Institution think tank in Washington, said releasing names and salaries of top executives could be intrusive and would not serve a public good.

“When you turn it into specific names, it’s kind of voyeurism,” Elliott said. “It’s not the principles anymore, and I think it does violate their privacy.”

He also said too much disclosure could prompt top executives to resign, harming companies as they try to recover and repay the government.

Very good points all.  On the other side, you have Democratic Representative Alan Grayson:

Grayson told Reuters he is unsympathetic to the argument that the pay czar should not name names.

“If this is the same top talent that caused their firms to be destroyed and put the entire U.S. economy at risk, I wish they would leave the firms and leave the country,” he said.

Note that Grayson does not rebut any of the reasons not to release the names.  He is plainly willing to treat these people as circus sideshows, to violate their privacy and encourage a sort of voyeurism for no public good, and risk harming the companies in which the government is trying to recoup their investment.

But Grayson goes beyond reckless insensitivity and lack of fiduciary sense to manufacture a fallacious argument in favor of releasing their names.  “If this is the same top talent that caused their firms to be destroyed and put the entire U.S. economy at risk.” He offers zero evidence that this premise is correct, and it almost certainly isn’t.  It is far more likely that these were the people that kept their firms afloat when a tiny percentage of their traders nearly blew them up.

Alan Grayson is clearly playing to the populist crazies who showed up at the homes of AIG executives who were receiving threats to themselves and their families.  That makes Grayson just another congressmen who considers hardworking individuals to be expendable if he can get some hay from destroying them.  And his ploy appears to be working; his outrageous distortion got him quoted in Reuters, after all.

It must be tough being a thoughtful congressman, someone sensible who doesn’t believe that any publicity is good publicity, and watching blowhards like Grayson getting the limelight for their hateful blather.