It?s pretty clear how Jane Sasseen of Business Week feels about federal government meddling in financial-sector compensation:
With the threat of a financial meltdown receding, Treasury Secretary Timothy Geithner has a new project: reining in the pay of bankers, traders, and other financial players.
Good luck with that.
?
[P]ast efforts by regulators to limit executive pay have never made much of a dent. The current push may not be more successful.
Unlike the Obama administration officials pushing for new regulation, Sasseen foresees the possibility of unintended consequences:
One case of unintended consequences: the Clinton Administration’s 1993 efforts to curb executive pay by limiting companies’ tax deductions for salaries over $1 million. A loophole allowed unlimited, fully deductible pay in the form of options ? and the Gilded Age of lush executive comp was ushered in.
Why might bureaucrats ignore warnings about unintended consequences? Mises might say it?s in their nature, since every socialist is a disguised dictator.
