The Obama-nation of the day: This week Obama signed a bill limiting the compensation of executives of companies who were receiving bailout money to $500,000. Sounds reasonable, right? It's unfair for those executives who have run their companies in the ground to get millions in compensation courtesy of the taxpayers, while the companies are laying off thousands.
No, it doesn't sound like a good idea to me for several reasons.
- First, this is only Obama's first step in setting salaries for all kinds of companies in all kinds of industries. Just like his first step in instituting socialized medicine is giving insurance to children (b/c who can deny the children?), his first step in "spreading the wealth around" is limiting the compensation of executives getting bailout money, because who can object to that? It's a very slippery slope. It may sound silly now, but in 20 or 30 years, will there be a government pay chart telling us exactly what nurses or business people or cable guys can make? This is the first baby step to that. Next he will tell us what ANY company who gets any type of federal money (not bailout) can pay their employees, and then it will take off from there. That's not what America is about.
- Second, to turn these companies around takes incredible business talent not possessed by just anyone. If someone with that type of talent and experience is only going to make $500,000 at one company, but millions overseas or at a company not receiving bailout $$, why work for the failing company?
- Third, some of these executives ARE doing their jobs well. In huge corporations, maybe one honcho is leading his division to record profits, even though the company is overall losing money. Why should that honcho be punished?
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