I rarely feel conflicted on issues, but I’m not sure what to think about compensation limits for executives at banks that have received bailouts.
On one hand, it is incredibly destructive for the incompetent and venal politicians and bureaucrats in Washington to interfere with private compensation decisions.
On the other hand, companies that are sticking their snouts in the public trough are no longer real private entities. And if we want to discourage more firms from trying to fleece taxpayers, I suspect there are few things more effective than threatening the salary of the CEOs and other top executives.
I’ve been doing a lot of media on this topic. As you can see from this CNBC clip, this is a tough issue to handle, though I always try to make the one clear point that the entire problem could have been averted by not doing bailouts in the first place.