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"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others." Ayn Rand | | Nobody's listening. |
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Yesterday I spelled out for you the "suggestions" and "guidelines" the Obama administration has for executive pay. These guidelines are meant for executives at any publically traded company. Are you letting that sink in, folks? We are talking about the government setting guidelines for how CEOs at private companies will be paid, whether or not they have received bailout funds, TARP funds, fun funds or whatever. A top counselor to Treasury Secretary Timothy Geithner says, "We believe that compensation practices must be better aligned with long-term value and prudent risk management at all firms, and not just for the financial services industry." That's what the tax cheat's counselor believes. I believe the government has no business whatsoever getting involved in how private companies compensate their employees. The role of the government is to provide a forum where employment and pay contracts can be adjudicated and enforced ... nothing more.
As for companies that have received bailout money, the government's new "master of pay" will be setting the actual specific compensation levels. You don't have to be government educated to realize that this is going to mean that the brightest and most capable talent out there. What capable executive wants to work for a private-sector company where government hacks with not one-tenth of his ability will be setting his salary?
Some Democrats are upset. Any rational person would be upset over the fact that the government will be meddling in the compensation levels of private businesses. But this is not what they are upset about. They are upset because they feel that the Obama administration's efforts to reform private sector executive pay haven't gone far enough.
One of those Democrats would be Rep. Brad Sherman of California. He says that the government's plans to have shareholder's vote on compensation packages should be made binding on board of directors. In other words, Brad Sherman should write the incorporation by-laws for America's businesses.
Of course, slobbering Barney Frank is another Democrat who believes that the administration hasn't gone far enough. He says, "I do differ with the administration in that hope springs eternal and their position seems to be that if we strengthen the compensation committees we will do better ... I believe the structure of compensation has been flawed." In other words, the government can do it better.
Speaking of slobbering Barney ......
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