The Administration to ORDER Pay Cuts

The Obama Administration has now decided to order the companies that received TARP money to cut the pay of their top 25 positions by 90%. I know this sounds good to everyone that knows they got TARP money and hell these guys are making millions in bonuses, so why not. Well here is the why not…
The government only gave tarp money to these companies so they could get the American people to go along with issuing orders to these companies. The administration knew that the people would never support the government issuing orders to private companies without involving tax dollars.


Look at the evidence, Lehman Brothers company was another of the too big to fail companies but wasn't saved so Ben (Bernanke) could scare congress into signing onto the Fed buying bad paper from failing financial institutions.  Lehman had to fail so the others could live.  The problem here is that the Fed already had the authority to purchase the bad paper without the 700 billion. The difference is that without the 700 billion TARP money the taxpayers wouldn't feel like they had a vested interest in the bailout and the government could never get the Americans to go along with the administration issuing orders to private companies. Salary caps for the highest paid employees will probably cause the best people to bail for companies that are not hamstrung by these orders.

Now for the reasons I don't believe the government should get into this business; we shouldn't have bailed these companies out in the first place, but given the fact that we did we should not impose orders on the way they are run.  We should say that 'until you pay back the government loans' we get to say what your bonus structure is, but that once the loans are paid back you do business as you see fit. This kind of tact would incentivize the companies' highest paid people to find ways of making the company profitable and pay off the loans. If the highest paid people leave the struggling companies then who will bring them out of their financial woes…the mail boy? Not likely, he is young and don't have anything yet (socialist leaning).

I don't know what would have happened if we hadn't bailed out those big banks and automakers and I don't know what is going to happen now that we have, except that I see us continuing to bail businesses out, our deficit continues to grow and now the President wants to bail out small business…but wait, do they get the same rules…if you make over 250k you get taxed at 100%? Or do the top 25 paid positions have to cut salaries by 90%?  If they only have 25 positions does everyone get cut by 90%?  Or there may be some other set of equally oppressive rules that will suck the life out of small business.  Small business will jump on the bandwagon because they need the loans but the cost to our freedom is going to be way too high.

prp