EDITORIAL: Barney Frank, salary czar

Las Vegas Review Journal ^ | 8/7/2009

[markomalley]

In a free market, we're so familiar with how prices are set -- how manufacturers decide how much of a thing to make and what they can afford to pay for labor and raw materials -- that we rarely even think about it.

Set salaries too high and charge too little for the product, go bankrupt. Pay too little, your unskilled workers can't do the job.

Yuri Maltsev, a former Soviet economic planner, reminds us the Communists had no such "consumer feedback loop." Trying to figure out what their national production quota should be for ice cream, they simply snitched the production figures for France, then corrected for the population difference between the two nations.

(snip)

Now, incredibly, the people in charge in Washington want to abandon the free-market system that made America the most efficient and prosperous nation in the world, instead allowing office-bound bureaucrats with none of their own capital at stake, to decide how much things should cost ("New cars? $4,500 off!") and how much everyone should be paid.

(snip)

But now, in a little-noticed move, the House Financial Services Committee, led by Chairman Barney Frank, has approved a measure that would, in key ways, go beyond the most Draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the government.

The bill gives Treasury Secretary Tim Geithner the authority to decide what pay is "unreasonable" or "excessive."