A McCain Voter Contemplates an Obama Presidency

I was going to write a poignant, insightful post about why this McCain voter is undismayed by the prospect of an Obama victory, but Peggy Noonan beat me to it. Saves me a few pixels, I suppose. An excerpt:

A great moment: When the press was hitting hard on the pregnancy of Sarah Palin’s 17-year-old daughter, he did not respond with a politically shrewd “I have no comment,” or “We shouldn’t judge.” Instead he said, “My mother had me when she was 18,” which shamed the press and others into silence. He showed grace when he didn’t have to.

There is something else. On Feb. 5, Super Tuesday, Mr. Obama won the Alabama primary with 56% to Hillary Clinton’s 42%. That evening, a friend watched the victory speech on TV in his suburban den. His 10-year-old daughter walked in, saw on the screen “Obama Wins” and “Alabama.” She said, “Daddy, we saw a documentary on Martin Luther King Day in school.” She said, “That’s where they used the hoses.” Suddenly my friend saw it new. Birmingham, 1963, and the water hoses used against the civil rights demonstrators. And now look, the black man thanking Alabama for his victory.

This means nothing? This means a great deal.

I’m voting McCain because I believe he has a better understanding of the cost of meekness in the face of fascism. But Obama has demonstrated that he knows he can’t afford to be held hostage by the extreme pacifist wing of his party. Ironically, the success of the surge has worked against its champion, McCain. An Obama Presidency that might have been a disaster two years ago is much less frightening now that the advocates of surrender have lost interest in the war.

For me, the redemptive potential of electing a black man as President is not a sufficient reason to support the candidate I consider less qualified to be commander-in-chief. But if Obama wins, my vote for the other guy will not prevent me from celebrating a joyous milestone. As Noonan wrote, this means a great deal.

Wall Street Compensation in the Bailout Era

As bonus time approaches, Wall Street firms are trying to balance the need to retain key executives against concern about the “optics” of giving boatloads of bailout money to the people who arguably created the need for the bailout.

It’s easy to sneer at what passes for frugality on Wall Street when it comes to compensation… so let’s indulge for a moment. From today’s Wall Street Journal (I think it’s a free link, but if not you can get the gist from the excerpt below):

In a sign that Wall Street is waking up to the political tempest over billions of dollars in year-end bonuses likely to be paid out at securities firms lining up for government infusions, top executives are in discussions to possibly cap their own compensation, according to people familiar with the situation….

“There are going to be some people in the financial-services industry who will show real leadership here and recognize the reality of the situation,” one senior Wall Street official said.

At least one major firm has looked at former PepsiCo Inc. Chairman and Chief Executive Roger Enrico’s move in 1998 to give up his $900,000 salary. Instead, Mr. Enrico asked PepsiCo directors to fund scholarships for children of “frontline employees.” Mr. Enrico still got a $1.8 million bonus that year.

Yes indeedy, “real leadership” — give up the high six-figure salary but keep the seven-figure bonus. And of course, the 1998 bonus of a soda-pop CEO is one or even two orders of magnitude lower than what is available on Wall Street in a good year.

I have mixed feelings about this. I’m a fervent capitalist and I lean libertarian, so I believe salaries and other prices should be set primarily by markets, not by government decree. I toiled in the Wall Street vineyards for many years, mostly at Merrill Lynch, and I believe my old firm and its competitors play a crucial role in the economy. I was support staff, not a revenue producer, which meant my annual bonus was a fraction of my salary, not a multiple. But I never complained about executive comp, because when the poobahs got more money, so did the gumbies.

Vermont Senator Bernie Sanders, a self-described democratic socialist, has renewed calls for capping compensation for executives of bailed-out companies at the $400,000 salary of the U.S. President. The idea has a lot of populist appeal — even John McCain expressed support for it during the height of the turmoil last month. (I could probably scrape by on $400K a year. I’d like to give it a shot, anyway.)

But I suspect the best financial minds on Wall Street will continue to find ways to reward themselves handsomely. If such a limit could even be enforced realistically, it would simply drive the top talent into less-regulated pursuits. Do we really want to move the center of gravity of global finance out of the public securities firms and into hedge funds?

So, what should be done about the admittedly scandalous prospect of paying zillions of dollars in bonuses with money ponied up by taxpayers? I dunno… that’s above my pay scale.