Conservatives have been criticized for unfairly imputing socialist sympathies or policies to President Obama, but our new president has now demonstrated that he is more than ready to embrace at least symbolic socialist policies. President Obama recently signed into law executive pay-limits for financial companies receiving future TARP loans in reaction to “shameful” bonuses received on Wall Street. The government may soon set wages for those at the top – perhaps for those at the bottom tomorrow?
In case you were wondering what the new, hopeful, changed socialism would look like, well now you know. It is a political Frankenstein – just like the old socialism. The President, shackled to an unpopular and embarrassing stimulus plan, tries to divert attention with banal demagoguery against greedy executives. Claiming that $18.4 Billion in bonuses represents an “unacceptable” figure (How does he figure this? What amount of bonuses would be economically efficient?), the administration has decided that it will cap the salaries (Does this even relate to bonuses?) for executives of future companies accepting bridge loans at $500,000.
They have pulled from thin air a meaningless number. Government has no way of determining what efficient or “appropriate” wages for these critical positions are. Nor do Treasury officials seem to be making any claim to have done so. But the administration does know what is good for its own health: running heedlessly ahead of populist furor in order to secure a percentage point or two more in the next opinion poll. We should fear our government’s willingness to impose aimlessly punitive numbers on the private sector and, moreover, how quickly it has done so.
Fortunately, this socialism is still only symbolic. It is unclear if the price ceiling rules affect any companies at this point, or if they ever will. Perhaps we will be lucky, and the measure will defeat itself by simply driving companies out of the bailout queue. But the line between the public and private seems less of a barrier each day, and President Obama’s stimulus plan will soon give the economy a very real, trillion-dollar shove toward – and perhaps across – that line.