Pay Czar

Evil Wall Street. Bailed out Bad Guys. And what's even worse, they all supported President Obama in the last election. That the Administration's Pay Czar should rule that Wall Street exec's should forfeit 90% of their compensation seems only just.

It's not as if the government doesn't have a rational basis for intervention like this into private businesses. These financial firms did accept billions of dollars of public moneys. Shouldn't the government have some input on how that money is spent? But let's look a little closer at this rationale.

Government largess always comes with strings attached, and appropriately so. But in a society of laws, any such conditions should be spelled out before hand. For instance, if an institution accepts tuition from a government student loan, it is explicit that such institution shall not discriminate against student applicants or employees on the basis of race, creed, and etc. By the same token, if you accept a tax deduction for your home interest payments, you are accepting the obligation to honestly report your actual qualifying interest payments.

However, after taking the interest deduction, if some bureaucrat demanded that you, say, house a homeless person, I think you might be a trifle outraged at such a confiscation of your property, no matter how good the cause might be. In this respect, what conditions did the government put on the bail-out funds to Wall Street? As they say these days, zip, zero, nada. What right then does the Administration have today to dictate compensation packages, ex post facto? In a nation of laws, no right whatsoever.

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Not to mention that the Administration has about zero expertise in the complicated field of executive compensation. Base salary coupled with incentive bonuses, frequently involving stock options in the firm, carries a long pedigree in the industry, and its unclear on what basis the Pay Czar deems them excessive, other than the economically illiterate contention that they are just "too large."

Which brings another problem with the Czar's diktat to Wall Street. Just what was the process that resulted in this decision? What facts and evidence were included, what industry, trade, and civic associations consulted, and what economic analysis and experts relied on in deriving this latest policy? We simply don't know, and the lack of transparency in the process behind this extraordinary new policy is unprecedented in my life time.

In truth, this move by the Administration is just the camel's nose of the extension of government into every nook and cranny of American citizens' lives. Rep. Barney Frank has already given notice of his desire to extend the concept into non-bail out industries.

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