Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.
“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.
He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.
Now I think anyone getting paid $35 million dollars for running a company into the ground is just as stupid as the next guy, but it doesn't affect me. And it doesn't affect you.
Yes, a small argument could be made that these wages could probably be better served being disbursed to the shareholders or among many employees instead of one bad one, but that is for the directors (and, by proxy, the shareholders) of the company to decide. Not me, not you, and certainly not the federal government.
As to those companies that managed their finances poorly and foolishly accepted federal money, the government has every right to attach strings. If theses companies are going to be allowed only to pay their chief executives what the president earns or less, a pox on them and their grubby hands for making Faustian bargains.
Wage and price controls are always a bad idea. Decisions cannot be made by central planning. Information is just as scarce a resource as any other and bad decisions by corporate boards are much easier to take than federal control of pay scales. Also there's that minor issue of personal liberty and the government having no authority whatsoever to implement such a bad idea.