Government Starts Fixing Pay

Obama has decreed that the federal government will now limit the salary of workers employed by companies receiving bailout funds. The WSJ has a detailed overview here.

The president had this explanation for this new and unprecedented law:

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.

Why does Obama bother mentioning what country he is the president of? Why does he claim that his country doesn't disparage wealth?

Because he's acting like the president of Cuba, and he sure looks like he disparages wealth. The very fact that he opens with a denial indicates he is hiding something, and it is exactly the thing he denies.

Some conservatives are suggesting some unintentional positive effects may result from this change. Companies will be less inclined to accept federal compensation. With less of an incentive for the best workers, these companies are also likely to shrink in their profitability (and many of them need to fail).

Also worth noting: Barney Frank came out today saying that the American people hated bankers. I couldn't disagree more. I think people are more angry at Barney Frank (among them is Bill O'Reiley who chewing out Frank on his show).

The bottom line is the government has started setting limits on the amount of money private companies can offer to their workers. The government wants everyone to be paid the same amount. This is the slippery slope among the many "opportunities" Rahm Emmanuel saw in the current recession.

Obama has said Americans don't hate the successful. Barney Frank has insisted they do. What no one has done is explain how CEO's earning large salaries has contributed (in any way) to the current recession. No one has explained how limiting their pay will help solve the recession. There is not even a claim that it will achieve anything.

In other words, paychecks are being limited by the government simply out of a Communist ideology and class envy.

This agenda of limiting the amount people can succeed (Rush calls it a war on American prosperity) will remove incentives to achieve. People will lose confidence that their hard work will be rewarded and the economy will suffer. The government will try more interventions which will kill motivation in individuals further.

It's time for the government to stop intervening in business. This was not the way America became prosperous, and it will never lead to prosperity in the future. The best thing government can do is to get out of the way.