I dont disagree with points 1 and 2. I do think that you might be a little off on point 3. Once the government gets their nose under the tent, they will get greedy and they will be jealous.
This action will get the “workers of the world” all riled up—in fact, this will get all workers looking at the pay of their managers and executives. Most average worker-bees have no idea what the top folk make. I know from experience that Senior VPs in the run of the mill financial institution make eight to ten times that of their front line employee. Bonuses of 60-80% were not uncommon. I was actually a little unsettled when I found out the pay scales.
The government wont HAVE to do anything, there will be a movement towards more organization and unions will see a revival.
THAT is the agenda here.
First, I was responding to Cavuto's point that the restriction of TARP recipient comp would spread throughout the economy WITHOUT addition regulation and restrictions.
I agree with you in that their initial move to restrict pay is a harbinger of their desire to legally restrict ALL business.
As I said, such restrictions would eventually have to be placed not just on partnership performance but even on the actually growth of companies...and it is hard, but not impossible, to see how they would tell companies to limit their sales to a certain level.
If they implement that level of control, they will have killed the golden goose.
My secretary were paid extremely well compared to others in NYC. In fact, in most years I paid her a bonus equal to her salary. The support staff, mostly young MBA's, were also paid handsomely out of the fees I generated, but their comp was decided by the Department Head with input from me
But as you can see, as a senior investment banker, my pay (except for a small salary) was almost all bonus. It was big but the pressure was intense.
Wall St firms compete with each other (i.e. the investment bankers at my firm competed with those at other for the same deals) and the more they are payed, the smarter they get (odd isn't it).
Also, the more the bankers are paid, the more creative they get. That is a good thing but also a bad thing. It is this arrangement that requires the firms to have good commitment committees to review and decide to put the firms capital behind such deals.
As a final note, if I hadn't made a lot of money for the firm, not only would I have received a minor (or no) bonus, but I would have had my staff removed (and possibly fired) and I might have even been fired. If I had been fired for poor performance, word would spread around Wall St and my career would have been over.