UPDATE: Although the Times article seems to imply (but not directly state) that only companies receiving bailout money will be affected by the legislation, the actual text of the bill is clear that it can apply to any depository institution with at least $1B in assets. The arrogance of this legislation is breathtaking.
The House Democrats must be really feeling their socialist oats, because they have passed a bill that, if enacted, would represent one of the final steps toward socialism in this country. Having already regulated the minimum wage in this country, House Democrats now are seeking to regulate maximum wages for employee of private companies as well:
WASHINGTON — The House approved a measure Friday that would put new constraints on executive pay, capitalizing on populist outrage over multimillion-dollar bonuses to Wall Street executives whose companies were bailed out by taxpayers.
The bill, introduced by Representative Barney Frank, Democrat of Massachusetts, enables regulators to ban payments that give workers what the legislation calls “perverse incentives” to take risks that could hurt the nation’s financial system.
The bill gives the Securities and Exchange Commission, among other federal regulators, nine months to propose rules for regulating compensation packages at institutions whose assets total more than $1 billion.
There’s at least a theoretical justification for this, in that the government now has at least part ownership in the corporations at issue. Of course, that is another way of saying that the theoretical justification is that we have already mostly socialized these industries, so we might as well go ahead and do it whole-hog.
This radical measure, however, is too much socialism for even the most liberal of Republicans, including Mike Castle of Delaware. This bill shows that there are fundamental differences between the ways that even the most conservative of Democrats and the most liberal of Republicans view private industry in this country. The vote on this measure illustrates with crystal clarity that no matter hwo conservative a Democrat might talk, once elected, they have no inclination to respect the free market at all.