People are justifiably mad as fire at Wall Street and other major financial institutions that have accepted significant public assistance to keep their doors open. And they're rightly furious that seven of the nation's major businesses have paid or proposed to pay ludicrously high bonuses and other compensation to their top execs.
These practices have turned the notion of free enterprise on its ear. When failing companies require, lobby for and quickly accept what amounts to corporate welfare at the public's expense, it's simply wrong to pay executives high sums to stay on. And companies that haven't accepted the dole, but which have put our economy and the security of ordinary citizens at risk and continue paying absurd sums to ineffective management, foster an irresponsible economic system in which no one is accountable for poor performance and disastrous decisions.
Yet, trying to fix these problems by empowering the U.S. government to dictate how much companies can pay their executives is an equally foolish practice. Evidently the operative White House theory is that successful companies can pay what they want; failing companies come under the federal thumb on compensation.
It should not be up to the White House, the Federal Reserve, the U.S. Justice Department, the U.S. Treasury or Congress to dictate who should be paid how much. That's a role for company management, particularly the boards of directors who too often have not exercised their fiduciary duties in anything resembling their responsibilities in a free enterprise economy. Too often they've just gone along with what top management wanted, contributing to the depth of the recent recession and the severity of our nominal unemployment rate, still nudging 11 percent in North Carolina and 9 percent nationally.
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