Paulson Relents to Executive Pay Downgrade

With Congress resisting him at every step of the way, and an American public with little patience with a Wall Street that can’t stay afloat on its own, Treasury secretary Henry Paulson gave into public sentiment yesterday, agreeing that a limit on executive pay must be included in the $700 billion government bailout.

“The American people are angry about executive compensation, and rightfully so,” said Paulson yesterday in an address before the House Financial Services Committee. “Many of you cite this as a serious problem, and I agree. We must find a way to address this in legislation without undermining the effectiveness of the program.”

As half of the team responsible for selling the government bailout to Congress, Paulson has met with strong opposition from a legislature unwilling to lay down before Wall Street. Having urged lawmakers to enact the bailout as quickly as possible, both Paulson and Federal Reserve chairman Ben Bernanke have been upbraided in their meetings with Congress this week, with one objector, Senator Jim Bunning (R-KY), labeling the package a eulogy: “The free market for all intents and purposes is dead in America.”

While the American public at large is still uncertain as to the merits of the bailout, there is no doubt about the resentment felt towards Wall Street executives who have thrived in spite of the economic turmoil. This is turn has caused elected officials to voice the disapproval of their constituents. Both major presidential candidates have also come down against executive pay in the wake of the financial crisis.