Government to top business executives: Want some bailout money? Got some rules.
The Obama administration's announcement yesterday that it would toughen executive compensation restrictions at some firms receiving federal aid signaled a broader strategy to remake how Wall Street's top financiers are paid, officials said.
The administration imposed a $500,000 pay cap on senior officers at companies that need special government assistance. But perhaps more significant is a new rule that bans those firms from offering additional compensation except in the form of company stock that can be redeemed only after the government investment is repaid.
Government to faith-based organizations: Here's some money. Have fun.
As a presidential candidate last summer, Barack Obama promised that his administration wouldn't award federal contracts to religious groups that only hire members of their own faith. As president six months later, he said his White House would consult lawyers to determine what hiring practices were acceptable on a case-by-case basis.
The executive order Obama signed on Thursday expanded his Republican predecessor's White House faith-based office. It also fell short — at least for now — of what Obama outlined during that July campaign speech.
Because government doesn't know anything about business, it will generally create far more problems than it solves when it tries to set rules for business, especially anyything as fundamental as compensation. So capping executives' salary is a very stupid idea. But we shouldn't waste any sympathy on those executives who want to socialize the risk for their operations and keep the reward private. They're getting what they asked for.
I'm not sure about the faith-based rules. Requiring employees to be of the same faith isn't exactly discrimination, but asking taxpayers to subsidize faith-based hiring isn't exactly kosher. If faith-based initiatives had a track record of success (some studies indicate they do), does it matter whether the helpers are all one religion or not? How much proselytizing will tax money be paying for?
Whether we like it or not, those who give out money are likely to put strings on it. If they don't, that's their prerogative, too. Anyway, I have an answer for both cases: Stop it! Let business take care of business and faith-based charities get money from the faithful.
