The American Spectator

The Spectacle Blog

The news that the administration will severely cut the pay of executives at some of the firms that got the most bailout money is, of course, terrible. This level of government activity in private affairs is truly frightening.

Then again, there is a good justification for it. These companies -- AIG, General Motors, Bank of America, etc. -- are only nominally private companies, if even that. They are being propped up with public funds, so shouldn't their compensation be determined by the government? You could see this problem down the road as soon as the government bailed these companies out to fix the financial crisis.

The immediate problem is that the executives at these firms, whose pay is being cut by an average of 90 percent, have no reason to stick around. Why would they suffer the low wages and contempt show to them to stay when they could bolt for another company and keep 100 percent of their earnings? 

Probably the administration has a fix in mind for that eventuality as well. Because they have a fix for every problem created by their previous fixes.