Tuesday, March 23, 2010

Feinberg Pay Czar Implements Rear View Mirror Socialism

Kenneth Feinberg plans to review executive pay at firms that took bailout funds to determine if any compensation paid during a short window should be returned. So says the Wall Street Journal.

The whole pay thing is too stupid. You want to review contractual arrangements. This is tantamount to rear view mirror socialism. If we want to regulate financial institutions so as to protect the public from excesses on Wall Street review how the pay packages work and what you have to do to earn the big bucks.

Big bucks are warranted in many cases. It's when the executive is incented to take huge risks by way of his/her bonus structure thats when the regulator needs to get in and protect the public.

Kenneth Feinberg may be trying to create a bully bureaucracy and try to intimidate Wall St. I can just see the next crisis. A bank president calls the Fed and says we're in trouble I need $200 billion right now. But no Feinberg or we let the joint burn down and to hell with it.