More Czars are on the horizon...

http://online.wsj.com/article/SB124416737421887739.html

WASHINGTON -- The Obama administration plans to appoint a "Special Master for Compensation" to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines, according to people familiar with the matter.

The administration is expected to name Kenneth Feinberg, who oversaw the federal government's compensation fund for victims of the Sept. 11, 2001, terrorist attacks, to act as a pay czar for the Treasury Department, these people said.

The government is also pursuing a separate revamping of financial-sector rules that could change industry compensation practices more broadly. For instance, the Federal Reserve is considering rules that would curb banks' ability to pay employees in a way that would threaten the "safety and soundness" of the bank.

Mr. Feinberg is expected to focus on pay restrictions related to firms receiving TARP bailout funds, helping companies to interpret the rules and ensure that they are being followed.

For instance, companies have been confused about whether to pay 2008 bonuses, since restrictions on incentive pay didn't go into effect until early 2009. Some firms have made the payments while others have held off. Many firms are also unsure whether the "top earners" targeted by Congress include rank-and-file employees or just executives.

Mr. Feinberg will report to Treasury Secretary Timothy Geithner, but he is expected to have wide discretion on how the rules should be interpreted. Firms likely won't be able to appeal decisions that Mr. Feinberg makes to Mr. Geithner, according to people familiar with the matter.

There are companies out there right now, afraid to make-good on contracts, for fear of the law changing after the fact, and themselves being held accountable. This is a really big problem as it illustrates that those companies have no faith that the Constitution Of The United States will protect them from this administration.

United States Constitution:
Parts of two sections.

Article I

Section 9.

No bill of attainder or ex post facto Law shall be passed.

Section 10.

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

Many firms are also unsure whether the "top earners" targeted by Congress include rank-and-file employees or just executives. The Constitution also provides protection for individuals against direct government action. It is clearly stated in many different ways. The Constitution was written to LIMIT the power of government NOT grant it. Too many people have forgotten what the Constitution was written for, or in current times, have never even read any of it.

Another point requiring attention is the fact that the government is appointing a "czar" to oversee the implementation of pay restrictions. The scope, for now, is limited to those companies which received bailout money. If the goal was only to effect those companies which received bailout money; why would you need to appoint a czar. The U.S. Government already owns controlling interest in most of the companies involved with the bailout. The Fed could limit executive pay from the board of directors without the appointment of a czar. There is no need for a czar; that is unless the final goal is to control the pay of employees working for companies that had nothing to do with the bailout.

This is a move designed to sneak in control without people noticing. The idea is to have a bogeyman; in this case it happens to be the executives of companies. Most people have some degree of class envy; this salary control scheme plays to that envy like the sweetest music.

Note: You DO NOT need to register to leave a comment.