Wednesday, February 04, 2009

Caps for CEO's and Hollywood

This restriction on CEO pay for companies that took bailout money is a bad omen. It is a bad omen in no small part because several of the banks in question were forced to take the money, even though they did not want it. What is to prevent the federal government from deciding to punish a CEO (who, say, hasn't been donating to the right people) by forcing the company to take a bailout to force the company to lower the CEO's wages?

The last cap imposed on CEOs was a disaster too. In lieu of pay, people started getting bonuses and stock options. The latter caused many to cook the books to drive up stock prices. When the CEO's exited, they sold their stocks at the artificial price. The next CEO came in and was shocked to see what was happening. Enron, anybody?

Earlier tonight Mark Levin suggested that Hollywood actors -- many of whom support CEO caps -- should also get salary caps. Perhaps the same caps as the CEO's get. A caller suggested extending it to professional sports. See how they like it. I'm with him. Some Republican, just to make a point, should offer it up as a bill.

Or, better, how about a bill to tax every single dime over $500,000? Then people can get paid whatever they want, but will only get to take home $500,000. Now there's a Democratic idea!

On the other hand, a simple restriction could do things like lower the cost of making movies, which could lower ticket prices. Since mostly poor and middle classed people go to the movies, this would really help them out financially by lowering their entertainment costs. I would think that all the Hollywood Left would welcome such a change with open arms, since it would help out the poor so much.

Of course, the tax idea could send a lot of money to Washington, so maybe they would prefer that route. Of course, I would guess that what would happen with the tax is that it would act as an effective cap, with companies simply not offering to pay more than $500,000, so it would work out to be a cap anyway. So let's do it that way. That way, we get a quick influx of cash to the federal government -- then an effective cap. What Leftist Hollywood actor could possibly object to such a fair proposal, one which helps out the federal government and the poor directly?
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