Wednesday, February 04, 2009

I like it but I don’t.

President Obama wants to impose a $500,000 cap on executive pay for banks that are receiving money from the bailout.

Am I glad that failed companies and their managers are getting their frills taken away? You betcha. But that is only after they received all the tax money as a crutch—which I disagreed with for the most part.

If I was a CEO of a struggling company, I would think long and hard before accepting any kind of assistance from the government. The crew on Capitol Hill isn’t just going to give away money without strings attached. There is a real danger of giving up control over how one can conduct business.

Now the government is going to come in and start dictating how much compensation is allowed. They’ve already proved that they can keep companies from purchasing things like corporate jets. Is it right that the government can do this? My simple answer is yes. When tax money is involved, hell yes the government can and should put as many strings on that money as possible. This is the people’s money after all and it shouldn't be given away to line other people’s pockets.

Accepting government aid is a sticky trap that can enhance a government’s power over areas where it doesn’t necessarily need to be. Let’s take education and roads. These are issues that are within a state’s purview. The states are responsible for setting up and maintaining these systems but they have in large part been dictated by the federal government. Why? Because the federal government gives away money with strings attached. Want a funded school lunch program? Then you’re going to have to give standardized tests. Want millions of dollars to repair roads? Then you’re going to have to increase the legal drinking age to 21.

I want to say again, I have no problems with government strings. I just happen to think that you should avoid the government at all costs if you plan to have it your way.


Anonymous said...

Good points. I can foresee a not-so-distant future where the government controls every aspect of life... and it scares me.

I don't know how to fix the economy, but I do know that accepting government money (and the attached strings) is going to hurt business in the long run.

Having said that, I just balanced my chequebook and I wouldn't mind my own personal bailout package at the moment. :)

john said...

Pretty good post. I don't understand a lick of business, but this made some sense.