Today, Rep. Barney Frank (D-MA) and Congressional Democrats have taken their false outrage over AIG bonuses a step farther by introducing a plan to limit pay for employees who work for TARP recipients. The entire controversy over executive pay demonstrates why the government has no business interjecting itself into the private sector. Washington has gleefully jumped at the opportunity to rack up political points over an episode that involves a small fraction of the total taxpayer money wasted during the bailout spree, but unfortunately has left the larger problem unaddressed.
As political outrage over bonuses continues to spawn more bad legislation, we can see the precise folly of mixing government intervention with the free market. Washington has done enough to damage the private sector by injecting itself into businesses with no discernible exit strategy. Now, Democrats are pushing legislation that would do irreparable harm to already-struggling recovery efforts by driving away the folks who are needed to repair our financial sector. Government bailouts have led us down the path of institutionalized tyranny. And, all signs out of the White House and the Speaker’s office point to more bailouts and more wasted taxpayer money.
Government needs to get out of the bailout business once and for all. The best way to avoid the controversy over bonuses and compensation is to remove taxpayers from the position of having to pay them. The Democrats’ false outrage over executive bonuses – information that was available weeks before President Obama and his friends in Congress took to the airwaves to denounce such an irresponsible use of taxpayer money – has been a trying experience for those of us who understood the problem with these bailouts from the beginning. We are entering very dangerous territory by allowing our country’s politicians to prescribe what’s best for private businesses and their employees.