More Government Intervention

According to this Wall Street Journal article, the administration is considering means of controlling compensation by banks to executives. The lead-in says this:

The Obama administration has begun serious talks about how it can change compensation practices across the financial-services industry, including at companies that did not receive federal bailout money, according to people familiar with the matter.

These "evil executives" have been the target of populist ire for some time. And, to be sure, there are real issues with compensation. For example:

The initiative, which is in its early stages, is part of an ambitious and likely controversial effort to broadly address the way financial companies pay employees and executives, including an attempt to more closely align pay with long-term performance. [Emphasis added]

There is little doubt from years of economic/finance research that when compensation is based on short-term performance, you get short-term behavior. Therefore, compensating more on the basis of long-term performance should lead to more long-term behavior. But, what is the "long-term"? How you compensate a CEO who may have a useful life of 5-6 years on the basis of this "long-term performance"? Is this really the job of the government to determine compensation schemes in the first place?

But the story takes a turn for the worse:

At the same time, House Financial Services Committee Chairman Barney Frank (D., Mass.) is working on legislation that could strengthen the government's ability both to monitor compensation and to curb incentives that threaten a company's viability or pose a systemic risk to the economy.

Yes, this model of forward-thinking, ethical, and public-interest centered behavior is working on legislation that places more power in his hands. This should cause everyone to shutter just a tad.

Economic Decision-Maker-in-Chief

President Obama, it seems, has decided that he gets to direct how people choose to make their living. According to a Fox News story, Mr. Obama has decided that Wall Street will "play a less dominant role in our economy." More specifically:

Wall Street is not going to play as dominant a role in the economy as regulations reduce "some of the massive leveraging and the massive risk-taking that had become so common," President Barack Obama says.

and:

"That means that more talent, more resources will be going to other sectors of the economy," he said. "I actually think that's healthy. We don't want every single college grad with mathematical aptitude to become a derivatives trader. We want some of them to go into engineering, and we want some of them to be going into computer design."

Well, I tend to agree that corporate profits were at least in part a result of under-regulation in terms of the rules of the game, these quotes show the arrogance of Mr. Obama that he somehow knows what you ought to major in while in school. Through the looking glass....

Setting Us Up

Mr. Geithner now blames the United States for the current financial crisis, unwittingly (or, maybe not) putting us on the hook as the responsible party to pay the costs. Well, it may be true that Americans excessively borrowed, but that means the world excessively lent. But, this is the typical "guilt talk" that solely blames lenders for "predatory lending practices" and absolves borrowers from the act of taking out a loan they knew they were at high risk of being unable to repay. To be sure, the current economic situation is a bitter pill we will have to swallow, but setting the precedent that we are primarily responsible only gives the world justification to absolve themselves of their own responsiblity. Typical for this administration...

Stirring the desPot

Yes, this is the President of the United States shaking hands and smiling with Hugo Chavez.

Chavez is a man that has declared the United States an enemy of the world...a terrorist state, etc., etc., etc. It is one thing to politely ignore him, but something altogether different to shake his hand and smile. Imagine how this is being played in the state run media in Venezuela...

Absolutely Insane

This Wall Street Journal editorial points to the insanity of Barney Frank. It is bad enough that he was a key player in the current financial disaster. But, more importantly, he is plotting the next economic disaster. Mr. Frank is a danger to the Republic.

Rhetorical Inconsistency

Even Paul Krugman notices that the Obama administration has been completely inconsistent with its economic story...that says a lot.

Say What??

A testament to the stupidity of some people. Here is the warning label on the back of a fishing lure:

Or what about this one from a hair dryer:
Amazing. This means that not only has someone done these stupid things. They have done them, sued, and won!! So, who is more culpable? The idiot, or the idiot jury that allowed them to win the case?