Hayek noted that there is a self-accelerating tendency built into economic interventionism. The more the government messes around with the economy, the more it creates the apparent need for still more rules, regulations, taxes, subsidies, etc. to deal with the problems created by previous interventions. We’re seeing that in Washington right now. The latest proof of Hayek’s insight is that we have a “compensation czar” to decide how business executives at firms taking federal money will be paid.

Today’s Wall Street Journal has an excellent editorial about this new expansion of federal power.

The last paragraph is devastating: “The new pay limits betray once again that Washington’s dominant impulse today is leveling and redistribution. Puts caps on success, raise taxes on what you can’t cap, and then give the money to someone else. None of this will encourage the entrepreneurial spirits we need for a buoyant economic recovery.”

Yes, and to that I’d add that economic recovery is also going to be obstructed by the fact that the government is sucking more and more resources out of the private sector to pay for its own flabbergasting spending spree. Instead of economic expansion, we can look forward to years of stagnation — at best.