Will the Obama administration’s meddling in the affairs of business ever end? That’s what I am asking as I read Treasury to name pay czar on Wednesday.
The Obama administration on Wednesday will name a ‘pay czar’ with power to reject compensation plans at companies receiving “exceptional” government aid, an administration official said on Wednesday.
The administration will also call for “say-on-pay” legislation that would give the Securities and Exchange Commission authority to require public companies to hold nonbinding shareholder votes each year on executive pay, the official said.
The pay czar, or “special master,” will review compensation structures for the top 100 salaried employees of firms receiving exceptional assistance, the official said.
Obama Tells American Businesses to Drop Dead
Kevin Hassett at Bloomberg writes Obama Tells American Businesses to Drop Dead.
I’ve finally figured out the Obama economic strategy. President Barack Obama and his team have been having so much fun wielding dictatorial power while rescuing “failed” firms, that they have developed a scheme to gain the same power over every business. The plan is to enact policies that are so anticompetitive that every firm needs a bailout.
Once that happens, their new pay czar Kenneth Feinberg can set the wage for everybody and Rahm Emanuel can stack the boards of all of our companies with his political cronies.
Microsoft Chief Executive Officer Steve Ballmer came to Washington to announce what Microsoft would do if Obama’s multinational tax policy is enacted.
“It makes U.S. jobs more expensive,” Ballmer said, “We’re better off taking lots of people and moving them out of the U.S.” If Microsoft, perhaps our most competitive company, has to abandon the U.S. in order to continue to thrive, who exactly is going to stay?
Hassett is talking about Obama’s proposal to end the deferral of multinational taxation.
I have a simple suggestion. Instead of taxing American businesses to death in the United States, why don’t we eliminate corporate income taxes in the US altogether? That way, businesses would not have an incentive to hide profits, waste money inventing schemes to defer profits, and most importantly businesses would not leave the US to do it. Indeed, having the lowest taxes instead of the highest would encourage business to locate in the US. Wouldn’t that be a good thing?
Interestingly, I already wrote about the “Drop Dead” idea in relation to healthcare and Kennedy’s plan to partially pay for it by raising taxes on businesses. Let’s review Kennedy’s Healthcare Bill Will Increase Expenses, Decrease Employment and Encourage Outsourcing.
Something Is Severely Broken
Something is indeed broken and Kennedy’s bill sure is not going to fix it.
“America Health Choices Act” is a horrible piece of legislation that does nothing to reduce costs but instead increases them on businesses. A better name for it would be “Delayed Recovery And Outsourcing Encouragement Program” or DRAOEP.
I tried to come up with a name that would equate to DROPDEAD (because that is what Kennedy’s plan says to businesses) but could not quite make it.
Instead of reducing taxes on businesses, Kennedy’s plan will increase them. I listed 10 consequences of Kennedy’s healthcare plan, and none of them were any good.
In general: The bill has a negative effect on hiring, a negative effect on business expansion, a negative effect on corporate profits, and it promotes outsourcing. Moreover, it will delay the recovery of the stock market and it puts the brunt of the burden on businesses that cannot outsource.
Moreover, his handouts to GM and Chrysler, giving preferential treatment to unions will have a detrimental effect on the bond market. His meddling in the bankruptcy settlement of the automakers was blatantly illegal, but he will get away with it anyway.
If Obama wanted to meddle in something that needed meddling he should fire Geithner, audit the Fed, and try and figure out how to dismantle both the Fed and FDIC as detailed in Eight Step Program to Improve Fed’s Image.
Instead Obama is meddling in everything else. If you think any of Obama’s schemes are going to help the recovery, think again.
Mike “Mish” Shedlock
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