He Who has the Gold Makes the Rules

Pay Czar Kenneth Feinberg has ordered the executives of the seven companies that received federal bailout fund to steeply cut their salaries by around 90% of what it was last year. He said the executives of these troubled companies must trim their pay packages, according to a FOX news report. Feinberg reviewed the pay packages (stock, salary, perks, and other compensation) of 136 executives. They were the top 25 staffers at seven bailed-out firms. Feinberg's order to trim executive pay was the same thing that President Obama told executives during February. There are many critics of Feinberg's actions especially those that tout themselves as free-market capitalists. FOX analyst Andrew Napolitano says Feinberg's action leads America down a "slippery slope." Neil Cavuto was on the O'Reilly Factor Thursday evening and Cavuto disagreed with Feinberg ordering top executives of those firms that received bailout money to steeply reduce their compensation.

I can predict the response of conservative radio talk show hosts such as Rush Limbaugh, Sean Hannity, and Mark Levin to name a few on Feinberg's actions. All of these radio talk show hosts claim to espouse free market principles. All three of them would say that Feinberg's actions are unconstitutional and the the government has no business whatsoever dictating the pay scale of the top executives in the private sector. They would all say that's unconstitutional. Let's take a glimpse at this scenario real closely.

I agree under ideal situations that it's unconstitutional for the U.S. government to be stepping into the private sector and dictating the compensation of either the executives or the common laborer. To take it a step further, Feinberg's position as pay czar is unconstitutional. There's no call under the U.S. Constitution to appoint a czar. A czar doesn't belong in American government. They aren't elected by the American people nor are they accountable to Congress or the American people. That's a Russian office. I just mentioned under ideal circumstances that the federal government has no business dictating to executives in the private sector what their compensation should consist of. The question that should be asked is it ever appropriate for the federal government to dictate the pay of top executives?

If I was to pose this question to Limbaugh, Hannity, and Levin they would all say that it's always unconstitutional and never appropriate for the government to dictate the salaries of these executives. However, there's nothing constitutional about these giant corporations receiving bailout money from the American taxpayer. When did Congress ever receive the authority to bailout these corporations? Congress bailing out these corporations violates the principles of a free market. Under a free market a business has just as much of a right to fail as it does to succeed. If a business doesn't have the means or know-how to compete in the marketplace, then they should fail. No questions asked. Therefore the constitution was violated when the government stepped in and granted TARP money to these bankrupt firms. What right does Congress have in using taxpayer money to bailout these troubled firms? These huge corporations should've been broken up into smaller businesses, according to my view. The old adage still remains: He who has the gold makes the rules. When these troubled corporations stick their hands out asking for TARP money, then they're in essence asking for handcuffs to be placed on them. They waive their rights to run their corporation as they see fit when they ask for bailout money. It's their fault. They're saying to the government they can't run their own economic affairs when they ask the government for money.

I know some of the arguments that will be made in regards to Feinberg's actions. The argument will be made that if Feinberg will regulate executive pay from those firms that received bailout money, then he'll regulate other firms that didn't receive any TARP money. Another huge argument against Feinberg regulating executive pay is that "big money attracts big talent." Well, I'm sorry about that one. When a corporation receives bailout money from the government they have no business paying their executives huge bonuses until they've paid back all the bailout money in full. The executives should be paid handsomely when their companies are financially profitable. They shouldn't enjoy the privilege of handsome salaries when the American taxpayer is footing the bill. That's not right! I don't enjoy the thought of the government stepping in to regulate executive compensation in the private sector. However, those firms had no right to come to the government with their hat in their hand asking for money. If these corporations don't want the federal government dictating to them how much they can pay their executives, then they shouldn't be asking for bailout money from the government. That's plain and simple! I refuse to stand by and support top executives deciding their own compensation when they violated free market principles and asked the American taxpayer to bail them out. They should have their salaries trimmed back as long as the American people are footing their bills.