Regnat Populus

The people rule.

Fedzilla Sinks Its Claws Into More Banks

Posted by Max Barron on May 13, 2009

BLOBPIC2

See! We told you so!  When the Fedzilla first began discussions of limiting or involving itself in executive pay for TARP recipients, we told you it wouldn’t be long before they expanded those policies and more to non-TARP banks.  We were right.  Yes, once again our oh-so-trustworthy federal government has once again decided to expand its reach, scope and power in such a way that would make The Blob envious. 

From The Wall Street Journal:

WASHINGTON — 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.

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.

Administration and regulatory officials are looking at various options, including using the Federal Reserve’s supervisory powers, the power of the Securities and Exchange Commission and moral suasion. Officials are also looking at what could be done legislatively. 

There’s no real surprise here at all.  Conservatives were railing about this inevitable overreach months ago.  The statists are going to do what statists do… which is expand the government and grab control of everything that they can get their grubby meat-hooks on – by hook or crook.

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.

Speaking of crook… The banking queen is undoubtedly rubbing his slimy paws together in anticipation. Regulating compensation of banks – even non-TARP banks – must be a wet-dream come true. After all, he’s the Finance Committee Chair. This would give him unprecedented power and reach – “Do as I say, or I gut your pay… Give me what I want, and you get your bonuses.”  I’m certain that he is apoplectic with glee at the mere thought of puppeteering the financial institutions of the U.S. – money and power being the purveyor of his every masturbatory fantasy.

Financial institutions are just the beginning – phase 2, if you will – and it won’t end there, my friends.  Quote me on that.  In fact quote the Government officials on it as well.

Government officials said their effort, which is just beginning, isn’t aimed at setting pay or establishing detailed rules. “This is not going to be about capping compensation or micro-management,” said an administration official. “It will be about understanding what is the best way to align compensation with sound risk management and long-term value creation.”

In an indication of how broad the effort may become, Federal Deposit Insurance Corp. Chairman Sheila Bair said regulators need to examine compensation practices in the mortgage industry, suggesting new limits could stretch beyond banks.

The administration official claiming that these moves aren’t really about capping pay and micro-management – which they obviously are – had to be laughing out loud at his own incredulous and unbelievable lies.  Considering that the administration is openly stating that they are doing precisely what this official is saying that they’re not.  Then the official turns around in the very next breath and tells us the exact opposite.  Which is fairly unsurprising.

Also, unsurprisingly the statists all but flat out say that they know best, and therefore should tell these institutions how to best run their businesses… because Freddie and Fannie – both sponsored by the government and overseen by Barney “Blowhard” Frank – did so well, right?  Speaking of Freddie and Fannie, Sheila Bair says mortgage institutions are next on the Fedzilla’s platter.  It is only a matter of time before the wheels of Capitalism are ground to a destructive halt… and our economically viable futures with it.

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