From the latest Fortune:
When Senator Chris Dodd, (D-Connecticut) crammed what he dubbed “tough new limits” on “lavish Wall Street bonuses” into the stimulus package, he may have created a bigger problem for the economy than the one he was trying to solve. The reason? His plan inadvertently rewards nonperformance and will drive talented financiers away from the companies that need them most.
“There will be a flood of top performers leaving for positions that have no restrictions,” says Richard Smith of the Sibson compensation consulting firm. The pay rules “will slow the only financial engine that can pull the economy out of this mess.”
Since members of Congress pay no penalty for their mistakes, though, it?s unlikely that Sen. Dodd and his compadres will learn the law of unintended consequences.
