Saturday, February 7, 2009

Socialist insanity!

This week Terence Corcoran decried the $500,000 caps being placed on executive salaries at US financial institutions receiving bailout money. He argued that this would result in the financial industry’s best and brightest moving to sectors that offered higher compensation - at a time when they're needed most where they are. That seems like a no-brainer.

Well, it wasn’t long before Barney Frank, the Dem House Financial Services Committee Chairman, came up with a solution to Corcoran’s objection:

[Frank] said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.

One assumes that generously compensated Hollywood stars and athletes should also start worrying. And even worse:

The provision will be part of a broader package that would likely give the Federal Reserve the authority to monitor systemic risk in the economy and to shut down financial institutions that face too much exposure, Mr. Frank said.
That’s rich. The reason so many "financial institutions faced too much exposure", and precipitated the current financial crisis, is that they were responding to government legislated coercion to make risky loans to people that couldn’t afford them.

Wonderful! The solution to a problem caused by socialist policy is more draconian socialist policy.

Furthermore: The comments to Corcoran’s piece appear, with a couple of exceptions, to be completely ignorant of the US government role in the meltdown laying the blame entirely on the bankers. Most of the lame-brains seem to think that more government interference in the banking system is a good thing. It’s as if the FP comments thread was hijacked by the rabble babble crowd.



rabbit said...

George Jonas had an article in the Post today where he said this...

Just as chemically-addicted personalities feel compelled to take one pill to perk up and another to relax, regulation-addicted societies promulgate one law to counter the effects of the other. It doesn’t even occur to them anymore that if they stopped taking “uppers,” they wouldn’t have to take “downers” and vice versa.

We've become regulation junkies, and the U.S. Congress needs its fix.

Curls said...

As someone who works in the regulated financial services industry, take a look at the spider's web of regulators in Canadian banking. You have OSFI, FCAC and the Ombudsman. It seems banking is a field where the bureaucrats outnumber the workers. And now with the added charms of FINTRAC, the industry is bogged down in an ever increasing list of requirements. In Canada, it is now not possible to open a bank account without a current unexpired government issued photo ID. Even forbid you are 95 and have no current drivers licence or passport. You can't open a bank account.

JR said...

Yup, we're already over regulated and this 'crisis' is being used as an excuse to load on even more. We can only hope that Barney Frank's radical ideas don't get anywhere in the US - and if they do they aren't imported into Canada.