You can't spell crazy without C, Z, A & R

According to Treasury Secretary Timothy Geithner, the federal government is concerned about what companies pay their top executives.

"We need to help encourage substantial reforms and compensation structures, particularly in the financial industry," he said.

Of course you're thinking, "But Jay, these companies are getting tax payer money in the form of bailouts from TARP." True, and I don't have much heartburn with telling the CEO's of AIG, GM, Chrysler and the dozens of banks that took bailout money that they deserve a pittance of pay until the money is all paid back to the Treasury. But we're not just talking about that. According to this story from the not particularly right wing Marketplace radio program (distributed by Public Radio International) we have this to look forward to:

But the government's push to limit compensation may not end with companies receiving taxpayer help. Members of the administration are also talking about reining in pay in the financial industry as a whole. They'd like to replace the current bonus-heavy system with one that pays people for long-term performance.

President Obama is set to appoint a "Pay Czar" to carry out the administrations reform of compensation. Beside the fact that this is an extra-constitutional position accountable to no one except the President. I am deeply troubled by ease of this power grab. Are we just going to stand by and allow the federal government to decide not just how much to tax the highly paid, but how high that pay should be? The argument for this "reform" is that the bonus structure encourages high risk for short term gain and is therefore poses a "systemic danger" to the stability of our financial system.

Suppose the next issue the government wants to tackle is the potential for housing price bubbles. Having solved Wall Street's problems with a new, fair compensation plan for the financial institutions, the Pay Czar asks, "Is it reasonable to cap amount a realtor can make by commission selling a home so they don't have an incentive to 'artificially' inflate the price?" It almost sounds reasonable doesn't it? That's why its so dangerous.

The United States is not like France. We won't have massive strikes that shut down cities with people demanding social safety programs from the government. It isn't that obvious. But what we are experiencing right now is a well intentioned administration doing things that seem reasonable leading us down a path to socialism.

If we are going to walk this path, let's at least do it being led by people who are accountable to us and must get elected on a socialist plan, not these "czars" that are appointed without review of the Senate and answer to no one but the President.

-Jay