PrintApril 4, 2009
Meet Your New HR Director
Barney Frank and his fellow House Democrats appear to be determined to keep passing bills regulating compensation in the House until they hit upon one that Obama and the Senate will line up to support.
Two weeks after the People's House went after the A.I.G. bonuses with the ninety per cent tax bill that died on the vine without the support of the Senate or the President, the House has given it another try. On Wednesday House Democrats, and ten House Republicans caught up in the fervor, sent up another bill to restrict compensation at financial firms, with Barney Frank as its main author. The new bill is more encompassing and more alarming than the first one. The Library of Congress summary of the bill passed by the house includes these highlights:
- Prohibits payments under pre-existing or new compensation arrangements that are "unreasonable or excessive" according to standards set by the Treasury Secretary, for all employees of companies receiving TARP and other government funds.
- The Secretary must establish standards governing unreasonable or excessive compensation.
- All institutions subject to the bill must report annually how many officers, directors and employees receive total compensation over five specified thresholds, such reports to be posted on the internet, albeit without names [for now].
So the Treasury Secretary will, according to the house legislation, be the arbiter of what is "excessive and unreasonable." Now, Tim Geithner has a pretty impressive resume, but, as Republican Representative Tom Price of Georgia asks, "What experience does he have in setting compensation?" Will "excessive and unreasonable" be dependent on the political winds coming from Geithner's boss, or on who Obama is demonizing at the moment?
While we are at it, a quick look at Mr. Frank's resume shows there just isn't much business experience there either, although Rep. Frank certainly tries to project an aura of wisdom on business compensation issues. While Mr. Frank really wants to extend compensation restrictions to all financial institutions and even to all U.S. companies, step one for him is to begin establishing the government's new-found authority over private sector compensation in TARP-funded companies.
The passing of the House bill led Republican Representative Spencer Bachus of Alabama to ask: "Would our forefathers ever have considered giving the government a say on how much a private citizen earns, a so-called say on pay?"
The heavy hand of the United States government has crossed the line into the private sector in nationalizing corporations, controlling salaries and replacing executives and directors, not to mention having Obama as the de facto president of General Motors. Unless we are able to stop this in its tracks, there will be no end to the meddling of Obama, Frank and company, and it will become ever more pernicious, pervasive and oppressive over time.
In the meantime, meet the new HR Director, Mr. Frank, and his new compensation analyst, Mr. Geithner. Oh, by the way, Mr. Frank will be asking for details of your bank and investment accounts, your energy usage and the size of your home in the next few weeks, and Mr. Geithner will also be examining your tax returns. Both gentlemen are delighted to be on board.
