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That’s the question Ben and I take on in our Scripps Howard column this week. My take:
Pity the poor CEO. He’s spent the last few years making tens of millions of dollars while running his business into the ground — helping destroy retirement accounts, explode the unemployment rolls and generally devastate the economy. Now he goes hat in hand to the federal government for help and he’s supposed to take a pay cut? To only $500,000 a year? As the saying goes: Cry me a river.
President Obama is right to insist on pay caps for executives at companies receiving federal assistance. Taxpayers shouldn’t have to subsidize, say, Merrill Lynch’s $1,200 wastebaskets as the cost of saving the country from a new Great Depression.
That’s not to say Americans should completely give in to their populist rage. Capping the compensation of executives at thriving companies might feel good for a moment, but it’s almost purely punitive and it probably won’t revive the economy. That’s where our focus should be.
Executives at businesses getting a federal handout, though, have already failed. In a real free market economy they’d be out of work, their companies shuttered. They’re lucky taxpayers are helping them survive; they shouldn’t also expect to get ultra-rich in the process.
Ben says more or less the same thing, but with more emphasis on “those liberals are trying to ruin the free market system!”
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Maybe it’s too obvious a point to utter, but isn’t it the Republicans who’ve been screaming loud and long that single moms getting welfare “handouts” be required to do this and that as a consequence. How is a fat cat executive getting public monies any different? If anything, there’s even more of an obligation of frugality there ($500K being hardly frugal).
I note in the column, Ms. Callahan, that there are always strings attached to tax dollars. Always. As it should be. And it shouldn’t matter if the recipient is a CEO or a food stamp recipient.