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The Rise of the Mob Economy
Townhall.com ^ | October 23, 2009 | David Harsanyi

Posted on 10/23/2009 4:03:37 AM PDT by Kaslin

What's more infuriating, a government "pay czar" who can dictate the salaries of private-sector citizens or some corporate welfare queen who has the nerve to complain about a salary cut?

On a gut level, it's a tough call. Watching the same swine who begged for charity after spearheading the devastation of their respective companies take massive salary cuts is thoroughly satisfying. Yet in a broader sense, this unprecedented intrusion into the economy accomplishes nothing -- well, other than setting an array of dangerous precedents.

Who knew? Chicken-little governance comes with a steep price tag. Could anyone have imagined, even two years ago, that an unaccountable pay czar -- Kenneth Feinberg -- would have the authority to dictate the salaries of private-sector employees?

Yes, these companies were at the taxpayer trough. Which means that firms that accept aid from Washington should consider the "assistance" analogous to the help offered by The Godfather at his daughter's wedding. You're in for life. Existing contracts have no real value. A single political appointee may have the power to decide what you're worth.

And what if the companies that accepted bailouts -- Citigroup, Bank of America, American International Group, General Motors and others -- never pay back taxpayers? Do they answer to the White House in perpetuity?

To the astonishment of absolutely no one, Neil Barofsky, special inspector general for the Treasury, tells us that the American taxpayers aren't likely to recover hundreds of billions of dollars they "invested" to bail out financial institutions, Detroit automakers and bubble-inducing homeowner programs.

"While several TARP recipients have repaid funds for what has widely been reported as a 17 percent profit," Barofsky further explained to a Senate committee recently, "it is extremely unlikely that the taxpayer will see a full return on its TARP investment."

If TARP recipients are under the thumb of a pay czar, what about other corporations consenting to Washington aid or accepting contracts -- a group that grows with each misguided stab at stimulating the economy? And why stop there? Why not make all compensation fair?

"I don't think that's healthy, and I don't like it," Camden Fine, president of the Independent Community Bankers of America, said of the pay czar's cuts. "These are decisions for boards of directors to make, not the government. I think this is a very slippery slope."

Who greased this slimy incline of government intrusion by begging for handouts? They did. Yet the slippery slope argument is difficult to deny when The Wall Street Journal already reports that New York Democrat Chuck Schumer plans to press for legislation extending the pay czar's governance to all publicly traded companies.

Let's not forget that the compensation of many of these CEOs would have ended up at absolute zero had the market dictated their terms rather than Washington. Today many CEOs no doubt feel comfortable taking outsize bonuses and compensation exactly because they know full well that failure is not an option. Washington won't allow it, artificially propping up incompetence.

"If the administration actually follows through," writes Alex Tabarrok, an economist at George Mason University and blogger at the popular "Marginal Revolution," "most of these executives will quit and get higher paying jobs elsewhere. Executives not directly affected by the pay cuts will also quit when they see their prospects for future salary gains have been cut. Chaos will be created at these firms as top people leave in droves. Will the administration then order people back to work?"

Hey, why not?

Despite this undercurrent, the administration continues to expand needless intervention and "investments" into the economy that offer only the illusion of safety and a reality of stagnation.

And that's exactly what empty words, unlimited taxpayer funding and uninhibited regulatory power can buy you.


TOPICS: Business/Economy; Editorial
KEYWORDS: fascism

1 posted on 10/23/2009 4:03:37 AM PDT by Kaslin
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To: Kaslin

“The Obama economy is so bad...that the Chicago mob is laying off judges.”

http://barackobamajokes.googlepages.com/


2 posted on 10/23/2009 4:06:29 AM PDT by Mojave (Don't blame me. I voted for McClintock.)
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To: Kaslin
New York Democrat Chuck Schumer plans to press for legislation extending the pay czar's governance to all publicly traded companies

And that is the slippery slope into Fascism. The pay czar's governance, he has no authority to GOVERN! He never had any authority! He answers to no one but the President and Schumer wants to legislate and extend unauthorized authority?!

3 posted on 10/23/2009 4:20:21 AM PDT by EBH (it is the Right of the People to alter or to abolish it, and to institute a new Government)
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To: EBH
And that is the slippery slope into Fascism.

More like a headlong dive.

4 posted on 10/23/2009 4:26:44 AM PDT by Carry_Okie (Grovelnator Schwarzenkaiser, fashionable fascism one charade at a time.)
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To: EBH

The Pay czar decides and Geithner implements.

obama knows nothing. He is just a simple soldier who has stated his ideas and goals.

Ayers used this technique in directing Weather Underground murder by proxy.


5 posted on 10/23/2009 4:27:01 AM PDT by silverleaf ("For America today, decline is not a condition. Decline is a choice"- Krauthammer)
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To: EBH

This is seriously bad stuff. Nobody seems to be paying attention, though; Bambi’s populist rhetoric and class warfare strategy seems to be paying off.

Somebody made an interesting analogy: if you take a student loan from the government, does that mean the government gets to pick your major? Outside of a few general guidelines as to what programs qualify as genuine higher education, no; you go ahead, do your studies, and pay back the loan.

But this process was so corrupted from the start, including things such as forcing companies to take TARP funds, that it was clear the objective all along was to take over these companies.


6 posted on 10/23/2009 4:35:30 AM PDT by livius
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To: livius
including things such as forcing companies to take TARP funds

Thank you. So many here forget what was discussed just a few months ago. How some of these institutions were coerced into taking TARP and then told they couldn't repay it without passing a government stress test after they discovered the deadly strings attached to it. C'mon people WAKE UP! They cut pay for private employees and yet pay out 7.5 million in pay and perks to the folks at Fannie Mae? You have a congressional critter willing to legislate authority to an unelected, unaccountable CZAR! Yeah...I'm a little more that behind a computer screen p-o'd.

7 posted on 10/23/2009 5:10:56 AM PDT by EBH (it is the Right of the People to alter or to abolish it, and to institute a new Government)
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To: EBH

This is all so gay. These so called authorities cannot even figure right from wrong, so let alone could they author any story that would make any sense.

I’m afraid it’s going to take a major thing to get started on kill’n those 26 inch rim f@g drug dealers who think they own the neighborhood while being high.

The world is awash with them apparently.


8 posted on 10/23/2009 5:11:18 AM PDT by JudgemAll (control freaks, their world & their problem with my gun and my protecting my private party)
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To: Kaslin
The Gov bought or rather stole GM, AIG, etc. Owners get to make these decisions. We can't have these folks making more than a GS17 or whatever the top civil servant pay grade is called(\sarc).

The problems are:

  1. Unconstitutional overriding of the bankruptcy laws. GM/AIG/etc should have been broken up to pay the senior debt.
  2. Total ignorance in logic as a policy in our schools, so that Schumers jump from controlling what he owns to controlling what I own seems logical.
They've prepared their ground well. The populace is intellectually disarmed.
9 posted on 10/23/2009 5:14:17 AM PDT by slowhandluke (It's hard to be cynical enough in this age.)
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To: livius

Somebody made an interesting analogy: if you take a student loan from the government, does that mean the government gets to pick your major? Outside of a few general guidelines as to what programs qualify as genuine higher education, no; you go ahead, do your studies, and pay back the loan.


However, now that only the government will be providing student loans, they likely can influence your choice of major with various incentives. They can offer reductions in rates, extensions and even outright forgiveness of loans in return for various *desired* behaviors.

Physicians can get loan forgiveness for practice in *underserved* areas. Teachers who major in *needed* specialties and who agree to teach in *underperforming* schools also get their tuition loans paid off.


10 posted on 10/23/2009 5:53:30 AM PDT by reformedliberal (Are we at high crimes or misdemeanors, yet?)
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To: Kaslin
would have the authority to dictate the salaries of private-sector employees?

Not strictly private-sector.

11 posted on 10/23/2009 7:12:59 AM PDT by the invisib1e hand (Fearing for the republic 24/7.)
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To: Kaslin

The solution to this government over reach is simple: publicly held companies will go private. That’s bad news for Wall Street.


12 posted on 10/23/2009 7:21:42 AM PDT by Night Hides Not (If Dick Cheney = Darth Vader, then Joe Biden = Dark Helmet)
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To: Night Hides Not
Like Chrysler? If these fascisti are not stopped there will be nowhere to hide. It may take a while, but not as long as one might think. Look at what they have done already in nine months.
13 posted on 10/23/2009 7:57:39 AM PDT by hinckley buzzard (Truth--The liberal's Kryptonite)
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