The Obama Administration’s “Pay Czar” has announced that the government will require several firms that participated in the bailout of the past year to cut the executive compensation for their top corporate executives. You can already hear the howling from the free marketers.
The funniest of the objections to the pay cuts is that these large Wall Street firms need to pay enormous bonuses in order to retain the best employees. Funny, you would think that people who ran their companies into the ditch and needed to turn to the government to bail them out might not be prime candidates for being re-hired. Human nature being what it is, and the effects of original sin being what they are, I suppose someone hired the architect of the FBI building after he designed that ugly blot on Pennsylvania Avenue. Some move directors still hire even when they have proven they can’t act their way out of a paper bag. So, maybe this concern is valid but I say – let’s put it to the test.
Others worry about excessive government interference in the free market. This is a concern that could have been raised before the bailouts. Now, it seems perverse.