Brian of Hoboken thanked Son of Mario for going after the Wall Street bonus money.
Then and there, I knew trouble was on the horizon. You see, Brian of Hoboken is a Bush/Rove man. And if he could not see the obvious-that the government has no right to compel Americans to give back money that they rightfully and legally earned- then I knew that liberal politicians had tapped into a powerful argument that would have a lot of support.
I tried to explain to Brian of Hoboken that with the exception of income tax policies that are applied to all, you do not want the government anywhere near people's salaries.
"But this only applies to banks that received federal loans" Brian of Hoboken replied.
When I tried to explain that this was just a first step, that the whole banking industry was being fitted for a salary cap, this Bush/Rove pal of mine did not think the government would go that far.
Think again.
The Wall Street Journal reported yesterday that the Fed plans on using its power to limit compensation in the banking industry.
Bankers Face Sweeping Curbs on Pay
Relevant quote below:
Under the proposal, the Fed could reject any compensation policies it believes encourage bank employees -- from chief executives, to traders, to loan officers -- to take too much risk. Bureaucrats wouldn't set the pay of individuals, but would review and, if necessary, amend each bank's salary and bonus policies to make sure they don't create harmful incentives. ... Its strategy appears to go further than what some in the industry were expecting, given that it would apply to many employees, not just top earners. It would go beyond a more generic list of "best practices" that many thought the central bank would craft.
From the founding of this country to the present day, Americans were born into a " the sky's the limit" system/culture. Its the kind of system that rewards ingenuity, invention, and yes even risk taking.
What the Fed is proposing puts a dagger in the heart of that system as it pertains to the banking sector.
What would have happened if some government bureaucrat told Henry Ford or Bill Gates they were taking on too much risk, and needed to change their business practices?
The truth is, we probably would not have produced a Ford or Gates if the American system did not reward these men in a big way for their revolutionary products.
What the Fed is planning will drive the best minds out of banking, at a time when we need them most.
It will encourage mediocrity, and punish those attempting to push the envelope.
And don't thing this policy applies just to the fatcats, it trickles down deep into the employee pool.
How bout this: where does the Fed get the power to implement such a radical plan?
Ah, the Fed says it already has the power to do this, under its power to ensure banks are solvent.
So no one votes on this, no debate, nothing.
Nationalizing industries followed by the feds deciding your salary. I can't believe I wrote that last sentence.
Before you know it, America will be complaining that Poland has gotten rid of missiles meant to protect our country.
Hey, Brian of Hoboken, what will you say to Son of Mario the next time you meet?
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