Friday, June 05, 2009

Reasons to be scared

Just a short post giving two very scary articles. Both suggest much more government intervention into the business world, which is the exact slippery slope we have been talking (and fearing).

From Clusterstock and the WSJ: Barney Frank Intervenes To Keep Open Massachussets GM Facility:
"The WSJ provides a good example of the kind of shenanigans we should expect under a government-run car company. Despite GM's need to streamline operation and close facilities all around the country, Rep. Barney Frank was not pleased when it decided to shut down a Norton, Mass. he gave Fritz Henderson a call"
that employed 90 people...So he gave Fritz Henderson a call"

and then quoting the WSJ further:
"A CEO who refuses the offer can soon find himself testifying under oath before Congress, or answering questions from the Government Accountability Office about his expense account. To that point, Mr. Henderson spent Wednesday with Chrysler President Jim Press being castigated by the Senate Commerce Committee for their plans to close 3,400 car dealerships. Every Senator wants dealerships closed in someone else's state"

and then one from WSJ on the supposed new pay Czar.
"The Obama administration plans to appoint a "Special Master for Compensation" to ensure that companies receiving federal bailout funds are abiding by executive-pay guidelines"
What makes this troubling is that can we really expect that "Special Master" will be leaving anytime soon? Or will the position become permanent? This is especially a concern given:
"The government is also pursuing a separate revamping of financial-sector rules that could change industry compensation practices more broadly. For instance, the Federal Reserve is considering rules that would curb banks' ability to pay employees in a way that would threaten the "safety and soundness" of the bank."

Thanks to Footnoted for the heads-up on this

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