Monday, October 26, 2009

A Tale Of Two Executives

The Obama administration is going after executive pay. This is no surprise; if a company gets in bed with the federal government by taking taxpayer money, they should expect the said government to step in and start taking the reins in some form. This is why bailouts were a bad idea in the first place.

But regardless of how you come down on the executive pay issue, there is an executive whose pay is untouchable. You just have to work for the right company. One that has always been in bed with the government.

"Freddie Mac is not just another company. It's alive today, and nearly 80 percent owned by the government, only because almost $51 billion in taxpayer funds were pumped into it over the last year. More bailout money also may be needed in the quarters ahead as losses from its troubled mortgages mount."

Private companies are being increasingly isolated as "bad". Government cronyism is increasingly being rewarded at taxpayer expense. That's saying something; cronyism has been around since George Washington first gave his half-brother's horseshoeing outfit a no-bid contract with the Continental army.

As long as their are two sets of rules, one for government-approved business and one for "evil" private companies, the economy will not recover. As soon as profit and competiton give way to favor-currying and tax money-fueled payoffs, a company is no longer a free market entity, and we're all the worse for it.

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