"That's Obscene!"

I didn't watch the grilling of several banking and Wall Street CEOs by the House Committee on Oversight and Government reform, in part out of protest: the committee's name includes government reform, not private-sector reform. These guys should spend their time trying to fix the government; Lord knows it needs fixing.

Anyway, I didn't watch it, but my wife did (there's my muse again). And she told me about how some of the committee members were basically asking, "Why are we here?", while others were ripping the execs over their pay.

Look, I won't argue that some of these guys are overpaid. It's not my place to; I don't own Citi or Merrill or Countrywide stock. But if their shareholders think they're worth it, pay them. Yes, I'm aware that the boards - who determine CEO pay - are packed with hand-picked cronies who are often CEOs themselves, making it sort of like a Ponzi scheme. But stockholders can make enough noise to attract the attention of a big fish who might see an opportunity to buy in, gain a board seat, gain control, cut executive pay, and improve the return on his investment - like a Carl Icahn.

It reminds me of when I served on an employee compensation committee for a company I worked for. Those of us on the committee came from different departments. I was in Treasury and Capital Markets, where I was responsible for trading futures and valuing the portfolio. We had a high-yield division, a group of very talented guys who managed junk bonds, which were pretty new back then. The committee was grading their jobs; the grades determined pay scales. So the leader of the group was making his case to us.

He gave the example of Michael Milkin, who was the father of the junk bond market, and worked for Drexel Burnham Lambert. He told us how much Milkin made, and a woman on the committee gasped, "That's obscene!"

No; child molestation is obscene.

The head of our junk-bond group patiently explained how much value Milkin created, how the companies that were able to raise funds through the junk debt market - companies that otherwise would have no source of funding - made products that saved lives, improved our quality of life, etc. And how those companies also provided valuable jobs for people.

All that's true, but my thought was, Milkin's not the head of Drexel, he's got a boss. If the boss thinks he's worth what they're paying him, where's the beef?

I also think Congress spends entirely too much time worrying about steroids in baseball, CEO pay, and other stuff that's not really the purview of our lawmakers. Most Congressmen themselves are overpaid in my opinion, and they take their fair share of junkets and other perks. And most aren't half as smart as a Wall Street CEO. And when they do finally leave office - if it's not in a pine box - they'll become lobbyists or consultants and make as much as those CEOs made. You think guys like Newt Gingrich and Al Gore aren't doing okay financially these days? Ever hear a Congressman question their pay?

My wife noted that part of the uproar was over how the Street could pay these guys so much for "taking advantage of the poor subprime borrowers." In a previous post I exploded that myth. The very greed that drives these guys to get up in the morning, to want more pay, bigger bonuses, a bigger jet, a bigger office, more vacation homes, etc., drove an awful lot of people to leverage themselves into more house than they could afford.

That greed is everywhere. I just pulled up Yahoo! Finance, and the top story wasn't last week's market rout, or our economy, which is increasingly looking like a fast-moving train going off a cliff. It was: "The Cars of the World's Billionaires." The teaser reads, "see what the world's richest drivers have in their garages."

We crave that crap. We want to know what brand of purse Paris Hilton is carrying these days, what sunglasses Tom Cruise wears, what car some rich guy drives. Then we lust after this stuff ourselves, and buy it even though we can't afford it, and as long as we're willing to do that, somebody will loan us money, on some terms, then sell off the loans to somebody else who'll package the crap into something some other poor schmuck will buy. And now it's all blowing up. Yet we still get these headlines, which may as well read, "Click here to see this woman naked."

Any of us "can" afford a Rolex or a Ferrari or a mansion, if we work hard and prudently manage our resources. But too many people want the bling without working for it. That's not what America is about. It's the land of equal opportunity, but no one ever said it was going to be the land of equal achievement or attainment. You've got to work at it.

The Bible doesn't say that money is the root of all evil. It says the LOVE of money is the root of all kinds of evil. High CEO pay isn't the problem. It's this insatiable lust for stuff, this rampant consumerism, that leads households to max out their debt to the point they lose everything.

And THAT's obscene.