Bloomberg news has an article on Wall Street pay revealing that the CEOs of many large banks have taken big pay cuts in the past year or two (CEO pay at the 50 largest financial firms has fallen 37% in the past two years).
Buried in the story was a revealing comment from Obama Administration “Special Master for Compensation” (Pay Czar) Kenneth Feinberg who declared that pay cuts for the CEOs of big banks “demonstrates better than anything the political impact of what I’m doing.” Feinberg goes on to suggest it would be “unwise” for bank chiefs to seek higher pay, and warns about the “political consequences” of pay decisions.
The problem with Feinberg’s “political” comments is that a “Special Master” is supposed to be a quasi-judicial official who makes legal findings or equitable decisions in accordance with objective legal principles. But Feinberg and others in the Obama Administration seem unsatisfied with setting equitable pay at banks that received Federal bail-outs: they’re on a “political” mission, doling out advice like mafia Dons about the “consequences” of “unwise” decisions.
It is all too easy to be angry about fat paychecks for big bankers. But turning control of pay over to the government doesn’t end up making things more fair, just more political.
Rather than bailing out banks and then politicizing pay, why not just end the bail-outs?