Front page, Washington Post, “U.S. to cut pay for bailed-out bosses“:
NEW YORK — The Obama administration plans to order companies that have received exceptionally large amounts of bailout money from the government to slash compensation for their highest-paid executives by about half on average, according to people familiar with the long-awaited decision.
Page 16A, Washington Post, “Rescue efforts shift to small business”:
The Obama administration is winding down several massive rescue programs that aided large banks and automakers during the heat of the financial crisis, while launching more moderate initiatives to help small businesses and the housing market….
The Troubled Assets Relief Program, or TARP, will now focus on the ailing housing market and small businesses, which are seen as vital to the economic recovery because they employ so many workers, officials said.
The Obama Administration has identified a real problem, the lack of credit for small business, and it’s good the White House is searching for solutions.
But we now know that accepting TARP money brings with the federal government’s control over the most basic of business decisions, such as the setting of compensation. If you’re a small business owner offered government financing under TARP, you’d have to be skeptical.
Maybe the salary won’t be an issue, but who knows what other strings might be tied to the aid? A neutrality agreement on union organizing? The parceling out of reserved parking spots?
UPDATE More from John Hinderaker, “Cut Their Pay and Send Them Home.” He writes: “One of the basic problems with the ever-increasing intrusion of the federal government into our economy is that questions that should be economic become political. What becomes most important is not providing the best product or service at the best price, but having the most pull in D.C.”
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