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EDHS Contemporary World Affairs -> Discussion Topics, Week B -> Bailout Junket?
Post Info TOPIC: Bailout Junket?
MrsCavalluzzi


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Bailout Junket?
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Wells Fargo recently cancelled a scheduled corporate retreat in Las Vegas amidst criticism that it was an inappropriate use of money given that they've received a government bailout.

http://news.yahoo.com/s/ap/20090204/ap_on_go_co/wells_fargo_vegas

In a related story, President Obama today unveiled a plan that would limit executive salaries at companies that accept bailout money:
http://news.yahoo.com/s/ap/20090204/ap_on_go_pr_wh/bailout_executive_pay

Should companies that accept bailout dollars (which, of course, ultimately come from the taxpayers) be restricted in their ability to spend it on things like junkets (all-expenses-paid luxury trips for people important to the company), or is it OK if the junkets are in the U.S. (many Vegas hotels are suffering significantly from the economic downturn, so an argument could be made that this trip was just a transfer of bailout funds from one struggling company, Wells Fargo, to another, Wynn Hotels)?

Is it appropriate for the government to set conditions like executive salary caps on bailout funds?  Or, do high salaries better enable corporations to attract the best people, who might be best able to lead the company out of the crisis?  (and again, if they are spending their high salaries in the U.S. to purchase goods and services, does that then create a redistribution of bailout money to other companies that might be struggling?)

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Bonemail-(Christophe K)


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Well from what I heard Wells fargo didn't even ask for bailout money but it was forced upon them. If that is true and I have no reason to not think so then they had all the right in the world to have that trip since it has been planned since before the bailouts. This just seems like more wall street hate spreading rather then a real concern.

If Wells Fargo did ask for the money though then they should not go. The money given to them was to be used to make loans and continue the flow of credit. The real irony is that this trip would not be a big deal if the other idea for getting debt off these banks was actually used.

As for trying to limit salaries of banks that recieved money I think it is outrageous. Buisnesses should be allowed to fail but since the government didn't let them now they are being punished. If you don't like the buisness men leading the buisness then don't give them my money. Then they won't have any to give to themselves.

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LaurrenM


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I think that if they opt for the bail out money, the money should be invested on employment, better employees, and some luxuries to a certain extent to stimulated the economy. For the most part i dont think that these companys should be taking trips to the most expensive hotels, but maybe the more mediocre hotels. Its a tough situation.

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ericaedgley


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I think these companies should be less selfish with their money. I agree with Laren. They should use their money twoards more important things and not on the finer things in life.

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Ayesha


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I think this is the reason we are in an economic crisis right now in the United States. People are using their money for selfish and stupid reasons that are completely unnecessary. The money can be used on much more important things that are very necessary right now.

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