Well, well, well, Comrade Obama’s Pay Czar Ken Feinberg came up with an industry wide solution to the elimination of private property and contract rights. Piece meal measures would obviously not work, since if only TARP institutions’ pay were limited, the high paid talent at those firms would depart for greener pastures just across the street. So, the obvious solution was to eliminate the greener pastures leaving no way for this greedy talent to escape. Today’s WSJ suggests that other countries will similarly restrict financial pay.
This is an unprecedented government intrusion into private property and contract rights. It should be held to be unconstitutional both as an uncompensated “taking” under the Fifth and Fourteenth Amendments and as being beyond the scope of the enumerated powers of the federal government under Article I Section 8.
The way Obama would argue around this is that financial services are vested with a public interest and therefore should be regulated under the interstate commerce clause. This essentially makes all financial services public utilities–federal public utilities!
Accepting this legal rationale arguendo the “regulation” is still more intrusive than necessary and more importantly violates the shareholders’ and directors’ rights to own and manage their corporations, their own private property. Further it often interferes with privately negotiated contracts. It is also a government restraint of trade, labor, in the free marketplace.
Finally, how in the hell does this dramatic confiscation get accomplished without a law being passed by our duly elected Congressional representatives? The only answer is that we have elected a dictator who operates through unelected, unvetted, unconfirmed czars.
The legal battles surrounding this will no doubt be waged over the next several years. BUT THE ECONOMIC DANAGE WILL HAVE ALREADY BEEN DONE. This like the health care travesty, is toothpaste that cannot be put back into the tube!
Politically, this is a case of finding and blaming a scapegoat for the sins of Barney Frank, Maxine Waters, Chris Dodd and the Democrats who committed the Community Reinvestment Act and supporting regulations and who incentivized Fannie and Freddie to foist more and more subprime mortgages on the world. No substitute for passing the buck!
Perceptive people will ask themselves who is next. I think it is a safe bet that doctors should be looking over their shoulders.
Tom Motherway