Not the ideal cap

Banking executives deserve a cap in the ass more than a cap on their compensation packages, but better the latter than the fascistic Bush approach of private black and public red:

The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan. Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends….

Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms. “It would be really tough to get people to staff” companies that are forced to impose these limits, he said. “I don’t think this will work.”

Obama is already shaping up to be a better president than George W. Bush, which is very faint praise indeed. It is beyond ludicrous to argue that it will be tough to staff companies for only $500k per year. Considering what a historically horrific job was done by the massively overpaid banking executives of the very recent past and present, there’s absolutely no empirical reason supporting the idea that massive compensation has any connection whatsoever to positive results.

And for those idiots who would claim that compensation caps are somehow anti-capitalistic, please note that since government regulates nearly every other aspect of the American financial system, there’s no logical reason it shouldn’t regulate executive pay as well. Many corporate executives have demanded socialism in the form of a government bailout, and so it’s satisfying to see that they’re getting it good and hard.

My only criticism is that the $500k cap is too high. There’s no reason not to knock those salaries back to $174,000, the current Congressional salary. After all, an executive at a bailed-out corp is little more than a government employee now.