Bad banker logic

I’ve seen variants of this argument in defense of permitting bailout banks to pay massive bonuses from various parts of the political spectrum, but it makes no sense at all:

We cannot legislate to cap bonuses or pay. There is no room in a free society for a law that curbs the pay proffered in private companies.

This may be true, the problem is that a society that hands over billions of dollars in public money to private companies is no longer a free society. If the government can hand money to the banks, it can take money away from the banks just as easily. So, this is a bogus and illogical line of defense.