"The Pay Dictator"

I was watching the news this morning, and the conversation I witnessed was very interesting. The reporter was interviewing Stephen Moore, one of the authors of a book called The End of Prosperity, which I haven't happened to read yet. They were discussing "Pay Czar" Kenneth Feinberg's decision to cut the salaries of executives at several bailed-out firms. Stephen Moore made sure to correct the reporter on calling Feinberg the pay czar.

"He's not the pay czar. He's the pay dictator."

I couldn't have put it better myself. Now don't get me wrong - I can assure you that these executives were paying themselves more than they deserved, all the while cheating out their employees and shareholders with jack for dough. The salaries the executives paid themselves were over-the-top and outright ridiculous. However, there is a deep message in all of this. Let's take a look at what happened.

These firms, which were on the edge of declaring bankruptcy, were bailed out with taxpayer money. Hooray for government intervention, right? What happens when executive salaries, wages, and the means of production are paid for by your tax dollars is that an alliance forms. Government gets to call more shots in the market, and the giant corporations get to call more shots in the laws. Since the corporations are now dependent upon public funds, the government, who controls those funds, also gets to control the aspects of production that are dependent on those funds. As far as I'm concerned, once an institution is bailed out, it provides an incentive for the government to gain an impressive amount of control over the market, especially since many of these bailed-out institutions are largely responsible for what happens in our economy.

What can the government now control in terms of that bailed-out institution? Almost anything - salaries, wages, prices, methods of production, distributive measures, shareholder payouts, what is produced, how it's produced, when it's produced, where it's produced - pretty much everything. Even if you don't agree with what the methods of production are, you're forced to pay for it anyway through the tax dollars that you rightfully earned. A large part of the market is now controlled not by the people, but by the ruling elite. When an institution is largely free of regulation, the institution has a responsibility to employees, shareholders, and consumers. If these people are not properly satisfied, it hurts business. The institution is then held accountable and must choose to make the proper decisions in order to satisfy the people they are responsible to. If they do not make the proper decisions, they can lose their employees, shareholders, and consumers through the system of natural selection that is the free market. Sales, profits, and overall stability decreases. Since institutions want to avoid this, they are motivated to make the right decisions. That is the magic of the free market.

Let's pretend you're a business owner.

Employees earn their pay by the wages you provide. The lower the profits, the lower the wages. You can't earn a decent profit if you pay yourself too much and don't leave enough for the means of production and the people who are expecting to be paid. If people find out that your wages aren't too great, less people will want to work there. You need workers to do the jobs that you don't have time to do because of your other responsibilities. I won't waste too much time explaining why workers are needed. It's obvious.

Shareholders are invested in your profits, since they themselves own a portion of your business. This means that they are dependent upon your profits. The lower the profits, the lower the payouts. If the payouts are too low, less people will invest in your business, and you might just dissatisfy your shareholders.

Consumers buy your product. They're the main source of your profit. If they buy your product, you bring in money. If they don't buy your product, you don't bring in anything. Thus, you must satisfy them. You also need enough profits to set good prices and make a high-quality product. If the price is bad, and the quality is bad, less people will buy your product, which will give your competitors an advantage.

See how much responsibility you have as a business owner? You dissatisfy people, and they just might take a hike. You get less profits. You don't want this to happen. You are motivated to avoid the worst in order to keep profits, stay ahead of the competition, and thrive. Simple as that.

When the government starts to stick it's nose in everything, however, force can be used to bring in revenue (which isn't profitable if you're spending more money than you take in). Money can be squeezed out of taxpayers whether they like it or not because paying taxes is the law. It's not voluntary. You can be jailed or even threatened for not paying your taxes. Therefore, most people will want to pay them. What you have is coercion. If you spend more money than you take in, which is usually the case with government due to reduced profit motive, then you add on debt. This means higher taxes, more inflation, currency degradation, and more. It's horrible for the economy. We're on the edge of destroying the dollar right now.

Excessive government intervention leads to waste and inefficiency. I mean, look what happened. The health industry was relatively unregulated - and then came the government with price controls, subsidies, regulations, tort reforms, and programs like Medicare. Is it any coincidence that our system got worse as intervention got heavier? Social Security's broke, Amtrak is broke, Medicare is broke, Medicaid is broke, every government program on the book is broke. If the government was a business, they would have failed decades ago!

The worst thing about this whole ordeal is that the pay dictator is letting executives of government-owned corporations keep their massive salaries - think GM and General Electric - in addition to thinking about regulating the salaries of private businesses that aren't even propped up by taxpayer dollars. This means that the big guys are going to literally squish the little ones into tiny little pieces. Oh, President Obama sure loves those small businesses, doesn't he? Unless they have money, that is. Then he stabs them in the back and accuses the millions of small businesses that belong to the Chamber of Commerce of having too much profit.

Since when can one man - the pay dictator - determine executive salaries? I mean, I could understand if Congress was involved. These are taxpayer funds, and Congress is supposed to have control over those funds. But since when can one man say, "Your salaries need to be cut," and be automatically fulfilled of his wish? This is dangerous, people! One man having so much control is not a good thing. Powerful corporations have been given even more ability to call the shots in the very laws we must abide. You'd better believe it.

On top of that, the Federal Reserve, a supposed "private" entity that is supposedly "separate" from the government has been given the power to monitor the activities and actions of other businesses. If you don't think these guys are power-hungry, string-pulling puppeteers whose ultimate goal is one-world government, you've got to be out of your mind. The proof is everywhere, people! This banking elite is the most powerful entity in the world. They must be destroyed.

God help us all.