Our New Paymaster?

As a part of its plan to reorganize regulation of the financial industry, and in response to the frenzy over the AIG bonuses, the administration reportedly is thinking about giving Washington oversight of executive pay. The federal supervision would apply to executives at all banks and other financial institutions, and could be extended to other companies.

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Put aside the fact that administering executive salaries isn't a legitimate function of government, and consider the effect that doing so would have on the economy. What will be the reaction from execs if Washington becomes their paymaster and de facto boss? Some will move their companies overseas where they won't have to deal with the problem. Don't believe it? Some oil companies, made villains during last year's run-up in prices, are already doing so. There's no economic stimulus in that, except for the country or nation-state that becomes the new corporate home. More...

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