In a country that is based upon the rule of law how is it that President B-Rock and his ilk can come up with a plan to cut compensation for executives that work for companies that have received federal bailout monies.
I wrote about a maximum wage initiative in January, February and April. Now it has come that it will probably happen. A clear assault on success and capitalism.
B-Rock's pay czar, Kenneth Feinberg, indicates that he will propose cutting the contractual salaries and total compensation for these executives. If the tax payers are to ever be paid back for the money given to these companies, General Motors, AIG, Citigroup, Chrysler and others then you will want the most successful business leaders leading these companies. But that will never happen if any executive and for that matter any employee has fear of their compensation being regulated by a government bureaucrat.
Because of these regulations and interference all of these companies will have leaders running them that are not focused on increasing shareholder value but on doing whatever they can to stay off a government noncompliance list. No business leader or executive will want to go to work for a company where their hands are tied behind their back and asked to brush their teeth. These companies will not succeed and the taxpayers will never be paid back. All because of government interference and regulation.
While some Americans support this policy because of class warfare these are some of the same people that never say a word about the money that Brad Pitt, Madonna, LeBron James or Tom Brady and other athletes and entertainers earn from their work. The reason I listed entertainers and athletes is because they are not responsible for creating jobs and contributing to the overall health of the economy yet they make millions of dollars for their work.
If we are a country based upon the rule of law then the Obama administration is seeking to be above that law. They are seeking to void contracts that are negotiated in good faith and agreed to by both the executive and the executive compensation committee at those companies. All because of government intervention into free market and the assault on capitalism.
Based upon the reasoning of receiving government bailout money how soon will it extend to companies that will have their compensation regulated because they do contract work or business with the federal government. What is preventing the administration from extending this regulation to the hourly employee with the reasoning that you may be making more per hour than a comparable government employee? Look out it is coming to your company!
If we are going to continue as a republic then we have to rein in our government. Enough of the attacks on success. Enough of governing by polls and public opinion. Whatever happened to common sense?
These are my words! Please post yours!
9 comments:
It goes back to what Reagan said about the best and the brightest....they work in industry, NOT for the Federal Government!
drjim
Obama believes just the opposite. Government is the solution and the best work there.
"While some Americans support this policy because of class warfare..." They would have nothing without that and race baiting.
Over at Cobb, Michael Bowen has an interesting perspective:
"You see it's easy to catch the symptoms of that religion of socialism/communism without catching a full blown case. And that's where I think most liberals are standing, in their b-boy stance, arms folded, head cocked and supremely arrogant. It is a stance I can no longer take at all seriously, given that I am taking the time to read fatter books and I am no longer impressed by politics."
As our government steps in to take over and destroy company by company many are sitting back and feeling joy over the result. The class warfare promoted by these actions will further divide and destroy our nation.
Perhaps some of these individuals are over paid and as a result over taxed. Private business should have a right to set its reward policy by way of wages and compensation. The biggest wrong was the bailouts to begin with. Failure is an option in any capitalistic society and with it comes new successes and advancements. This round of bailouts will probably cost us 20 years of success. Rather then rise up from the ashes stronger and more knowledgeable in their respected industries, we have chosen to reward bad behavior and only postpone the fall.
New to your blog, I like your article.
Basically the rationale is: if the firm took gov. money, then the gov. has the right to make these demands.
Not only does it ignore the previously existing contracts between the company and the employee, it threatens every last one of us. This administration also broke bankruptcy laws taking over the GM & Chrysler.
There is no clear limit to the principle. It basically equates to saying if you benefit from government, then government has increased rights over you. I benefit from gov. spending in, say, being protected by the military, in having highways, in schools, police forces, you name it. By this principle, the gov. has the right to control my income? What about my business? They are legislating forcing me to buy health insurance meeting gov. standards, what else can they force me to buy? Not just for me, but for my family - what else can they force me to do regarding my kids or spouse?
I know this sounds paranoid, but once the principle is allowed, to break contracts, break bankruptcy law, what limits will there be on federal power? If the Constitution no longer applies, no limits at all.
jodetoad
Not paranoid at all. Even if it sounds far fetched it is within the realm of government control. Take a dollar of benefit then lose all your God given rights of life, liberty and pursuit of happiness.
Obama helped to set new bankruptcy precedent when he placed unsecured creditors ahead of secured creditors and forced all of the secured creditors to take what the government negotiators wanted.
Liberals think the Constitution is a living ever changing document thus it really does not exist as a static set of rules but only as a guide.
ablur
No person ever feels that they are ever overpaid so regardless of compensation a contract is enforceable as long as it is entered into by two parties and there is a meeting of the minds of both parties. Also as long as one party is not being coerced.
So the change in compensation for the executives at those financial institutions is a form of coercion and therefore may be able to be challenged!? I am no lawyer but.....
The government has stood every form of trust and public confidence in business on its head. Secured and unsecured debt are the quintessential reason that confidence cannot be fully restored to the market place. It has destroyed retirement planning and has made all future investment capital unobtainable. This one act did more to lengthen our problem then any other.
Now, after making business stagnate, they choose to step in and remove performance modeled salaries from the business world. Our leader who has no real world business experience is suddenly gifted in the area of executive salary.
I am looking forward to court challenges based on contract law and hopefully going all the way to constitutional law. It will take some serious money but the odds are he has picked on the wrong crowd and the money will be available to take on this challenge.
ablur
I hope that you are right. I really do. All I need to do is go to work on Monday and find out that my salary has been reduced by 25% because the White House thinks that I make too much or because it is not fair that my subordinates rate of pay is greater than 50% of mine. That would be one of my fears.
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