For years, the government has mandated a minimum wage. Now it appears it will one day regulate maximum wage rates as well. No tears are being shed over the announcement last week by Bank of America Chairman Ken Lewis that he will not receive any pay or bonuses this year. But perhaps there should be some crying, or at least an outcry, because this was not a unilateral decision by Mr. Lewis, nor was it the result of an internal board vote. No, the reports are clear: Lewis “accepted a recommendation from government pay supervisor Kenneth Feinberg,” the bank said last Thursday.
Indeed, a dangerous precedent has now been set in motion, allowing that when the government pay czar speaks, corporations must do what has been decreed, especially in the matter of pay scales. Mr. Feinberg has cleverly asserted his authority without any apparent direct demands or controversy.
Such is the power of the present government. But, the assault on capitalism is clear and if anyone thought the new master of pay was merely a weak figure used as a token wink to the political far left, they must think again.
No doubt, critics of the Bank of America Corporation (BAC) and the banking system in general will say that this is an over reaction to what was merely a governmental “recommendation” in an extraordinary situation. However if the IRS, for instance, recommends that you change some figures that affect the valuation of assets on your return, you most surely “listen,” and that is the same type of force being exerted in this instance. BAC relies heavily on the Federal Reserve and other government regulatory bodies for its very survival. In short when Uncle Sam speaks, BAC must listen.
“Recommendations,” usually fast become mandatory, and in this case, the right of free choice is lost, not only for the specific corporations and corporate officers involved, but for everyone.
Surely, there are plenty of reasons to applaud the fact that corporate fat cats who got their companies and shareholders in trouble are not to be rewarded for their actions, especially when the corporation in question was in need of and received massive government bailout funding.
But that is also precisely why there is as yet little attention being paid to the fact that the government has just exercised an amazing new intrusion into American business and set a precedent for restricting pay to other executives purely as the czar, apparently, sees fit. And if at first it is executives, before long it is quite possible that the government could be regulating the price to be paid for any job.
Ayn Rand in her books Atlas Shrugged, and Fountainhead, among others, warned us of the effect of government “do-gooders,” trying to level the playing field for all, but in the process wrecking the concept of initiative and accompanying incentive, thus turning off the bright light of invention and competition.
If we allow our government to dictate on each and every matter and most especially on our fees for employment, we then offer no clear reason for anyone to do anything different, to create something new. Indeed, when we cede our rights to any other entity but ourselves, we are wiping out individuality in favor of a mass of sameness, ripe for regulating by an aggressive government. Perhaps, BAC Chairman Lewis could have best served his own shareholders and the American public at large by responding to Czar Feinberg that he would agree to take no compensation if the Czar would do so as well.
White House Chief of Staff Rham Emanuel has stated more than once that that no good crisis should be allowed to go unused. In the current financial environment, many a socialist position can be woven into the fabric of law and this is another lynch-pin in what is increasingly looking like the beginnings of the transformation of America from the land of the free to the land of the sheep.
While there are many abuses of power and money grabs on Wall Street and throughout the American business community and most likely always will be, the alternative of an all-knowing, all-powerful police state is much worse.
The last thing America needs is a pay czar, especially one being paid himself through tax-payer dollars.