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.

Do we really need the Goverment to determine how much pay is too much?

(March 7, 2008) – Like I was sayin’… they are prepared to step in and write any “wrong” they can find.

 In a news article today, I read all about how a house commitee is looking in the the “excessive” pay of some CEOs involved in the subprime issue.  Although the company and the share holders would be foolish to reward such performance, why is our government stepping in?  Did I miss the part of the constitution that give congress the right to make sure the corporate pay packages are fair an equatable?

Don’t get me wrong, if the leader of a company mismanages the company, he should not be rewarded, but do we really want the goverment to determine when compensation adjustments are necessary?  Reading such things makes me worry that we are headed back to the days of class warfare where we dispise anybody who is better off than us and look to the nanny state to make it all better by knocking them down a notch or two.

I was so glad when Mr. “the system is rigged and you can’t win” had to drop out of the presidential race.  The other part of the story was supposedly that he came for poor hard-working parents however, somehow he made it to be a multi-millionaire.  Yes, the system is rigged.  If you don’t work hard, you don’t get ahead.

I worry about the days when congress decides to look into my pay and decide that I make too much.  That will teach me to get ahead.