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Wednesday, February 4, 2009

Capping Salaries is Capitalism

Conservatives may be squawking lately about Pres. Obama imposing executive salary caps at 500K a year when their firms have accepted bailout tax payer money, but it's a great incentive for the private sector to avoid the turn left towards socialism. It's not Adam Smith, but it's surely a pointer towards the market economy, not away from it.

Why? It's logical, that's why. If your firm has a business model that does not require bailouts, then by all means, pay your executives what the market will allow. Fat cats are the by-product of wide open, entrepreneurial, anyone-can-be-anything societies. Bill Gates. It makes sense. On the other hand, if you need government to operate, you should expect now to be governed. We can hardly accept businesses wanting subsidies for failure and free market principles for salaries. That's not capitalism.

And so, I applaud the salary caps. It's a nod towards capitalism.

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