So the latest thing out of the nation's capital is a proposal that would limit the salary of bank head honchos...if the bank they work for is taking Federal bailout money.
And you might be surprised where newly elected President Obama is finding support for this plan. More on that later.
The cap is $500,000 in cash salary, but, execs can earn a nearly unlimited amount in restricted stock. How is it restricted? It doesn't fully vest until the bank pays back you and I and the rest of the American taxpayers, for the so-called TARP money.
So in order to make a pile of money, these guys would have to make smart decisions, turn a profit, and return value to their shareholders. It makes perfect sense to me. Which is why I find it all the more surprising that you have all kinds of folks beating a path on to CNBC to complain about it.
"Communism! It's the end of the free market as we know it!" they scream.
Look, I didn't pay attention THAT closely in college. But rewarding someone, handsomely, if the company they work for gets out of trouble and becomes profitable sounds like the free market at its finest. Here at little old Willamette Falls Financial in Lake Oswego, Oregon, we're about 2,900 miles from Wall Street. But the principles should be the same. If we don't do a good job giving people sound mortgage planning advice, we don't make money. If we DO a good job, offering learned counsel and sound advice, we DO make money. Why should you and I be on the hook for a bunch of guys making a bunch of dumb decisions.
No less a conservative stalwart than Larry Kudlow agrees with me... Watch last night's show on CNBC here...
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