The curious task

by Russ Roberts on October 6, 2009

in Financial Markets

From the WSJ:

The Obama administration’s pay czar is planning to clamp down on compensation at firms receiving large sums of government aid by cutting annual cash salaries for many of the top employees under his authority, according to people familiar with the matter.

Instead of awarding large cash salaries, Kenneth Feinberg is planning to shift a chunk of an employee’s annual salary into stock that cannot be accessed for several years, these people said. Such a move, the most intrusive yet into corporate compensation, would mark the government’s first effort to curb the take-home pay of everyone from auto executives to financial traders.

On the surface, this isn’t a bad idea. Until you think of all the things you can’t think of. And you remember your Hayek:

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

F.A. Hayek, The Fatal Conceit

So many things the government does are attempts to circumvent the bad things caused by something else they already do.


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