“THERE’S A DEAD SKUNK IN THE MIDDLE OF THE ROAD…”

9/23/08

One of the prices Democrats are demanding for acceding to the bailout crafted plan by Free Market Hank Paulson and Obsequious Ben Bernanke is a limit on the compensation of the executives who participate in the plan. (Normally, I would be the last guy to argue that the government ought to tell private employers what they should pay their people. However, there is an old adage that says if you take the man’s money you have to do what the man tells you, and never was the application of this adage more obvious.) Most of the other demands that the Democrats have made for their agreement to the plan have met only token resistance, but Free Market Hank is hanging tough on this one. Mr. Paulson says that restricting their executive’s pay would discourage financial institutions from participating in the plan.

Hmm…

Aren’t we being sold this Leviathan as being absolutely necessary to save financial institutions, and the financial system, from seizing up and breaking down? Now Mr. Paulson is telling us that financial institutions might decide not to participate in the program merely because their executives’ pay might become subject to government scrutiny. So how “absolutely necessary” is the plan if institutions can opt out because they don’t like certain provisions of the plan that affect only their top executives? Put another way, taxpayers are being asked to fork over $700 billion (What do you want to be that’s a low number?) but, according to the Treasury, if highly paid executives are asked to maybe take a pay cut they might just say “no” to the money. Just how desperate is this situation anyway?

As this morning’s Wall Street Journal reports, some congresspersons are seeking to “call Mr. Paulson’s bluff,” betting that, if the situation is as dire as Free Market Hank and Obsequious Ben say it is, the people who run these institutions will have no choice but to accede to the plan, pay restrictions and all, since the alternative is bankruptcy. But the Journal reports that the Treasury is arguing that “the program isn’t aimed at preventing firms from filing for bankruptcy but is instead supposed to help relieve pressure on firms that are being weighed down by a glut of assets they can’t sell.”

Hmm…

What happened to the “massive failures within days” without the program that Obsequious Ben was talking about last week? Suddenly, the program is not designed to avert “massive failures” and bankruptcies but merely to “help relieve pressure” on Wall Street firms. $700 billion not to prevent cataclysm but merely to relieve what Treasury appears to be arguing is the equivalent of heartburn on Wall Street?

Wall Street’s representatives in Washington, especially the Street’s most visible and obvious tentacle in the executive branch, had better get the story straight or the public’s olfactory sense will detect this deal for what it is.

Here is hoping that the rugged free marketeers who are standing in line for this bailout are so incensed by the idea of giving the government influence over their pay packages that they all opt out of the program, thus ending this latest, and most dangerous, bipartisan flirtation with socialism.