Last week, Obama announced that he was appointing a pay czar. Well .. he isn't going to exactly call this character a "Pay Czar," the official title will be "Special Master for Compensation. This is the guy who will be in charge of making sure that executives at evil financial institutions wouldn't make too much money At least, that is what we expected a pay czar to do. We are finally starting to get a better idea of what exactly the Obama administration had in mind. We will supposedly get all the details sometime this week. But here's a start ...

Any bank or corporation that has received two rounds of bailout money will be forced to submit changes in executive pay to be approved by the government pay czar, Kenneth Feinberg. Those would be companies like Citigroup, Bank of America, AIG, General Motors and its finance arm, GMAC.

Now do you really think that these pay restrictions will only apply to the institutions who have received two rounds of bailout funds? You're kidding me, right? Once the standards are set you can bet that the businesses and financial institutions will be under tremendous pressure to follow suit. This will apply to financial companies, US operations of foreign banks, and other private hedge fund companies and private equity firms. Even companies that repay the TARP funds in full will not escape oversight on their compensation structures. We are talking about the government setting the standards for an entire industry to make them more fair and comparable to other industries.

The principles currently being drafted by the Treasury Department will apparently allow regulators to tell banks when they need to change their compensation arrangements if the government feels it would "encourage too much risk-taking." What is defined as "too much risk" has yet to be determined. It will be a politically motivated government-style definition, though, and you can just guess what that will entail.

Here's a nifty little line that appeared in this article from the New York Times. Tell me that it doesn't make you do a double take ... to think that we once lived in a time when private companies like banks had the luxury of setting their own compensation levels! Here's the quote: "In the past, banks had free rein to determine the base salary and bonuses they awarded their employees." OMG! Can you believe that? Can you actually believe that there was a time in this country when private businesses could decide how to compensate their own employees? Just how backward were we? Any government-educated person certainly knows that this is a job for government, not the private sector.

Government setting private sector compensation ... change you can believe in.