House Financial Services Chairman Barney Frank is taking his TARP mandate and the Obama Corporate Management Strategy to the next logical step by proposing legislation that would heavily regulate the pay received by employees of companies that have received federal assistance.
Rather than simply viewing this legislation as another government power grab into the private sector it might be useful to examine the salutary effects such idiocy might bring about. First, start with the assumption that most of the private entities that have received federal dollars are probably not long for this world as it is. It will surprise no one that several large banks will not survive the year. With Fiat being declared junk today the Chrysler marriage seems doomed and GM appears to be signaling the inevitable bankruptcy that should have happened months (and billions of dollars) ago. Many of these institutions will cease to exist, and that is at it should be.
However, the Congress, in its infinite obtuseness, is determined that any stragglers in the federal government gravy train die off just as well. By passing a law that guarantees an employee the same treatment bankers and car execs have publicly received who in their right mind would want to work for a company that falls under the purview of the Pay for Performance Act of 2009? No one, that's who. Or at least no one that has any sense of self preservation and personal dignity (not to mention the attributes of personal ambition and a good work ethic).
Legislation of this sort will have the beneficial effect of causing any corporate CEO or Board of Directors to think long and hard about taking a dime of assistance from Congress in the future. That's a good thing. Similarly, healthy corporations not on the federal dole will recruit the best and the brightest (by offering better pay and benefits) from those companies stuck in the federal assistance trap and eventually drive them out of business. That's a good thing too, although the remaining employees on the wrong end of this particular form of marketplace natural selection may not see it that way. Perhaps this is what President Obama and Congressman Frank have in mind, but I doubt it.
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Filed under:
Barack Obama, Business, Congress, Democrats, Economics, House of Representatives, Politicians, Politics
Tags: Barack Obama, Barney Frank, Chysler, GM, Pay for Performance Act of 2009, TARP
Comments (8)
I hope the laws passes. An... (Below threshold)1. Posted by GarandFan | March 31, 2009 5:27 PM | Score: 5 (7 votes cast)
I hope the laws passes. And that no company then asks for bailout money. When asked by Congress via Barney Frank, some CEO can say "Fuck you!".
1. Posted by GarandFan | March 31, 2009 5:27 PM |
Score: 5 (7 votes cast)
Posted on March 31, 2009 17:27
2. Posted by Socialism Sucks | March 31, 2009 5:41 PM | Score: 6 (8 votes cast)
> When asked by Congress via Barney Frank, some CEO can say "Fuck you!"
Which will prompt Barney to drop his pants and say, "I love it when a plan comes together!"
2. Posted by Socialism Sucks | March 31, 2009 5:41 PM |
Score: 6 (8 votes cast)
Posted on March 31, 2009 17:41
3. Posted by Oyster | March 31, 2009 6:01 PM | Score: 5 (7 votes cast)
A Chrysler/Fiat marriage reminds of the terrific idea (I'm being sarcastic here) of the Sears/Kmart merge; Hey let's put two lousy companies together and see if that makes it better! And after having an inside look at how Sears/Kmart handles its pension plan, I figure it's an indicator of how the rest of the company is managed and I no longer wonder why they flounder.
3. Posted by Oyster | March 31, 2009 6:01 PM |
Score: 5 (7 votes cast)
Posted on March 31, 2009 18:01
4. Posted by Dave in W-S | March 31, 2009 6:54 PM | Score: 7 (9 votes cast)
If Congress were covered under a Pay for performance law, Barney Frank would owe US money.
4. Posted by Dave in W-S | March 31, 2009 6:54 PM |
Score: 7 (9 votes cast)
Posted on March 31, 2009 18:54
5. Posted by Dave in W-S | March 31, 2009 6:55 PM | Score: 4 (6 votes cast)
Of course, Barney Franks's notion of "pay for performance" may be a little different than most other people.
5. Posted by Dave in W-S | March 31, 2009 6:55 PM |
Score: 4 (6 votes cast)
Posted on March 31, 2009 18:55
6. Posted by Jonathan | March 31, 2009 7:01 PM | Score: 5 (7 votes cast)
Well, once again Barney Frank and his cohort of Democrats have decided that the Constitution is "just an old piece of paper" and have created their own rules. It is seriously time for people to wake up and start challenging these blatant offenses. Where are the Republican leaders on this? They need to be outspoken and challenge these fools.
6. Posted by Jonathan | March 31, 2009 7:01 PM |
Score: 5 (7 votes cast)
Posted on March 31, 2009 19:01
7. Posted by DaveD | March 31, 2009 7:43 PM | Score: 2 (4 votes cast)
"First, start with the assumption that most of the private entities that have received federal dollars are probably not long for this world as it is."
Hugh, this is what worries me. Did the government really buy a stake in GM (with our tax dollars) to allow it to die. Where does it go from here? What will it morph into? I can't believe that this administration has the smarts to turn it into a profitable entity that anyone would be interested in buying. Heck, the President cannot even get the traditional executive positions filled in his administration let alone those holes that are going to be vacated when the talent leaves GM. Would they let a company die that has all these union members, er, Democrat voters working for it. Maybe he'll turn GM into a big research machine on "green" automobile technology. I am sure that would be a much better reason for having the US taxpayer repeated "bail out" GM in his mind because of the noble work they would be doing. Frankly, I don't see where they're going with this.
7. Posted by DaveD | March 31, 2009 7:43 PM |
Score: 2 (4 votes cast)
Posted on March 31, 2009 19:43
8. Posted by the count | April 1, 2009 12:54 PM | Score: 0 (2 votes cast)
GarandFan, if nobody accepts bailouts and deprives Frank and his ilk of their ability to contorl those businesses, they'll just pass laws that extend to everyone regardless of bailouts. They *already* impose a minimum wage on ALL businesses, so why not a maximum wage? It's coming :(
8. Posted by the count | April 1, 2009 12:54 PM |
Score: 0 (2 votes cast)
Posted on April 1, 2009 12:54