Why Salary Capping is Wrong.

First things first: I will be starting a personal blog soon, chronicling the exciting life of a shut-in college student. From here on out, this will serve as a purely political blog. I’m not sure what the name or the URL of the new blog will be, but when I do know, I’ll be sure and post it.

Now, on to the fun stuff.

Salary capping is wrong. Not in that “it’s wrong that not everyone has healthcare” kind of “wrong”, but in the “this is an atrocious outrage that has no place in a free market or in the United States of America at all” kind of “wrong”.

Here’s the back story. President Obama assigned Kenneth Feinberg to the newly-created position of pay czar (for the record, I like to spell it tzar, so that’s the way we’ll be spelling it here from now on) to monitor the salaries of the executives at firms receiving funds from the government. Yesterday, Tzar Feinberg announced that he was capping all cash salaries at $500,000 and would shift the additional cash to long-term stock grants.

This decision is in an effort to coerce said executives to minimize risk-taking that benefits the company in the short-term. There has not been a clear answer to whether or not these restrictions will be lifted once companies pay the government back, though there is no reason why they wouldn’t.

This salary capping seems to be the administration’s way of holding the executives responsible for the financial missteps that they have approved or executed for their companies in the past. Though, in a pre-Obama world, if the missteps were as serious as the administration alleges, the executives would be held responsible by losing their jobs.

So the real question is this: Were these mistakes serious enough to fire the people at the top? If so, fire them. If not, let them continue their jobs. Do not take these half-measures in an attempt to punish these CEOs; either they deserve to be fired or they deserve to be left alone by the government.

Granted, the government has loaned them money, and they deserve to have a voice in the direction of the company, as any major shareholder would. However, I am pretty confident in the fact that a normal shareholder wouldn’t be able to control the salaries of the executives.

The government is making poor decisions for companies based on its strong opposition to free-market principles. Again. So here’s to capitalism. Or whatever is left of it.

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One Response to “Why Salary Capping is Wrong.”

  1. JayTravis1964 Says:

    The irony of the use of the term “Tsar” in reference to Obama is that the political slant of those whom the Obamination bends knee to were the ones who overthrew and then executed the Tsar and his family. (Perhaps this point should rest in the back of the minds of the Obama administration’s minions?) The more accurate title should be “Komissar” n. 1) An official of the Communist Party in charge of political indoctrination and the enforcement of party loyalty. 2) The head of a commissariat in the Soviet Union until 1946. 3) A person who tries to control public opinion.

    But as to the subject of the blog; salary caps. The problem is that Obama; a communist, is trying to merge with a more national socialist approach that the State should control “private” industry rather than overtly nationalizing it. This is not only inconsistent with his core dogma, but it also gives the appearance of having the intention of controlling the industries that are directly affecting his union supporters’ jobs.

    So in the end, it seems more like typical Chicago thug politics as usual. While he postures as a True Believer to the Marxist crowd, in the end he is simply using the office to run just another extortion scheme in the interest of those who have paid their “protection money” during the campaign- the unions. For a guy who so many compared to Kennedy and Lincoln, the sad truth is that he is closer to Capone, or Gotti. Which leads us to the REAL question…

    Where is Elliot Ness when we need him most?

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