If Obama’s Pay czar were limiting his meddling to only the salaries of executives at companies bailed out with taxpayer dollars, his role could prove to be a largely beneficial one. But, as Michelle reports, the “power-grabby pay czar wants his limits to be adopted industry-wide.”
You see, with such excessive regulation the cost of accepting federal funds, many financial companies ave an added incentive to raise private funds to stay afloat.
Bank of America did just that, using it available cash and raising $18.8 billion in capital to repay the TARP money, “it received during the height of the credit crisis last year and after its purchase of Merrill Lynch & Co. earlier this year“. As a result, it’s having an easier time finding a new CEO:
Bank of America Corp. has been having a tough time finding a new CEO willing to accept the restrictions that came as a condition of bailout funds. But recruitment is sure to be easier now that the bank plans to pay back its $45 billion in aid in just a few days to free itself from government oversight and pay restraints.
Banks, David Zaring observes, “will go to great lengths to avoid limitations on compensation, a trend that reached its amazing culmination when Bank of America, far from being awash in liquidty, paid back Treasury its $45 billion extremely quickly” (H/t for Zaring comment: Instapundit).
Provided Mr. Feinberg limits his endeavors to those private enterprises receiving federal funds, his regulation could serve a world of good. Too bad we didn’t have a fellow like him overseeing Fannie and Freddie. Wonder who it was who helped blocked reforms that would have placed additional oversight over those Government-sponsored enterprises?