Once upon a time, it would have been hard to imagine the day when we, citizens of the United States of America, would be reading headlines like “Obama Caps Executive Salaries” and “Obama Lays Out Limits on Executive Pay.” But alas, this day has arrived; the President of the United States is now in the business of regulating corporate salaries.
Operating under the pretense that he – a politician (with no business experience, mind you) – is both qualified and constitutionally authorized to manage the distribution of wages at multi-billion-dollar financial institutions, President Obama has set an annual salary cap of $500,000 for top executives at companies receiving taxpayer funds. According to Obama,
This is America. We don’t disparage wealth. We don’t begrudge anybody for achieving success. And we believe success should be rewarded. But what gets people upset – and rightfully so – are executives being rewarded for failure, especially when those rewards are subsidized by U.S. taxpayers.
The president is absolutely right, and perhaps this would have been a good argument for not bailing out the banks in the first place. However, now that the banks are receiving taxpayer funds, one would reasonably expect the president not to do everything in his power to drive these banks – and, by extension, billions of taxpayer dollars – even further into the ground through unnecessary, excessive regulation for the sole purpose of demonizing “greed on Wall Street.”
Some of these executives’ poor performances surely have not merited their lucrative salaries, but it is not the job of an elected official to make this determination. Moreover, if the banks felt that they could bring more effective executives on board at a lower cost, they would have done so. Setting wage ceilings, like virtually every market interference, will have unintended consequences down the road – such as driving away employees in search of higher pay. Unfortunately, judging by his actions during his first few weeks in office, President Obama does not seem to understand the law of unintended consequences. Instead, his economic philosophy reveals an antipathy toward the taxpayer and a hostility toward the free market.
Incidentally, what has Barack Obama ever done to earn his $400,000 taxpayer-funded salary?Published in