Goodbye Hope, Hello Fear

Like I was sayin… we need to have hope to avoid the impending catastrophe …

For most of 2008 we heard all about how we need to choose hope over fear and that change will come ending the politics of fear.  During his inaugural address, Pres. Obama triumphantly proclaimed that “we have chosen hope over fear”.  However, that has all changed now that he wants to quickly sneak a bill by the American people.

With support for the presidents massive spending/stimulus bill eroding, the president has turned to tactics designed to scare the American people into pushing for the passage of the stimulus without considering what the bill may actually contain.

Just recently, the president said “A failure to act, and act now, will turn crisis into a catastrophe”.

Charles Krauthammer’s recent article, “So Much For Hope Over Fear” did a fine job of laying out where the campaign rhetoric has given way to the out-dated politics of yesterday.

And so much for the promise to banish the money changers and influence peddlers from the temple. An ostentatious executive order banning lobbyists was immediately followed by the nomination of at least a dozen current or former lobbyists to high position. Followed by a Treasury secretary who allegedly couldn’t understand the payroll tax provisions in his 1040. Followed by Tom Daschle, who had to fall on his sword according to the new Washington rule that no Cabinet can have more than one tax delinquent.

As the American people questioned the Geithner nomination, we were told that we need to accept a man who doesn’t pay his taxes as treasury secretary because he is the only person who can help us avoid disaster.  The American people were also told by their new president that no longer will the presidency be mired in the old politics and influence of lobbyists as he signed executive orders saying that lobbyists could not work for his administration.  The next day, the president nominated several lobbyists to his cabinet.  Of course, they were needed because of the impending disaster and therefor it was OK.

Krauthammer also says in his article:

After Obama’s miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell — and that this president told better than anyone.

I thought the awakening would take six months. It took two and a half weeks.

It seems that once again, if it sounds to good to be true, it probably is.

Obama: Taking aim at Success

Like I was sayin… Life is so unfair.

Unless you live under a rock, you have heard that the Obama administration has put a cap on salaries for executives of companies that get a bailout from the tax payer.  This cap is currently set at $500k.

It would seem to make sense that if somebody so badly manages a company that the tax payers have to bail the company out, those managers shouldn’t be rewarded for failure.  Most people get rewarded when they do a good job and get penalized for a poor job.  I agree that those companies that need help should be penalized.

However, I am concerned about some of the things that Obama said during the announcement of the cap.  In part of the speech Obama says:

For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste — it’s a bad strategy — and I will not tolerate it as president.

This part of the speech is of particularly great concern.  It is aimed not at executives at failing companies, but executives at successful companies that have very generous compensation packages.  And as president, Obama will not tolerate it.

As a free market-capitalism loving American, I am very concerned about he ramifications of what can happen next.  I would hate to think that I live in a country that believes that if the economy is in recession, it is wrong for me to make a lot of money. 

Again, I don’t take issue with penalizing the managers of companies that need to be bailed out, but it would seem that Obama is indicating that further changes are needed to executive compensation in America.

Finally, these guidelines we’re putting in place are only the beginning of a long-term effort. We’re going to examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system. We’re going to be taking a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years, not just days or weeks.

“This is only the beginning of a long-term effort…”  It would seem as though Obama believes that the government should decide how executives are compensated rather than the owners of the companies.  Is this the first step in the long march toward the government deciding what pay scales are correct for which jobs?

We should all be concerned that one day the government may take an interest in how much each one of us makes each year and deciding what is fair.