We're Socialists, its official!

Check out this excerpt from a May 18th Article in Bloomberg:

May 18 (Bloomberg) -- Treasury Secretary Timothy Geithner ruled out setting specific limits for compensation as the Obama administration considers proposals to better align executives’ pay with companies’ long-term performance.

“I don’t think our government should set caps on compensation,” he said in answering questions at an event at the National Press Club today in Washington. “What I think we need to do is make sure we put in place some broad constraints on the incentives compensation systems create.”

Now, look at today's headline in Bloomberg:

U.S. Said to Seek New Powers for SEC Over Banks’ Executive Pay

"...Geithner is scheduled to meet today with SEC Chairman Mary Schapiro, Federal Reserve Governor Daniel Tarullo and executive- compensation specialists at the Treasury.

The Treasury chief said yesterday that the Fed and other bank regulators will define “standards and principles that supervisors would use to help bring about reforms in compensation practices in the financial industry.”

“A centerpiece of sensible reforms will be to tie compensation to better measures of long-term investment and return, and to adjust them to reflect the risk” incurred by executives’ decisions, Geithner said during a hearing at a Senate Appropriations subcommittee.

Changing executive pay practices is part of a broader initiative by President Barack Obama to overhaul U.S. financial rules in the aftermath of the crisis. Obama will unveil his “series of specific proposals” streamlining and reorganizing regulation on June 17, White House spokesman Robert Gibbs said.

This seems strange to me. If I were a bank president and someone said that they were going to cap my compensation, I'm out. I'll go run a hedge fund or I'll start up my own business were there are no caps.

Does the government have this right to dictate to businesses how they can be compensated? Does anyone have the right to tell me how much I will get paid? Only if someone else is paying me, which is precisely why the government required the banks to take the federal TARP dollars. Its not about solvency, its about control.

Grace & Peace