From TARP to wage controls

Geoffrey Lawrence

President Obama has appointed Kenneth Feinberg as his new federal “pay czar,” responsible for determining executive compensation packages at firms that accepted TARP bailout funds. Mr. Feinberg’s plan is to limit executive pay to $500,000 and benefits to $25,000.

David Harsanyi sums up this evolving TARP quagmire quite nicely in the Denver Post today:

“What’s more infuriating: a government “pay czar” who can dictate the salary of private-sector citizens or some corporate welfare queen having the nerve to complain about a salary cut?”

By now, it is a moot point to highlight the counter-productivity of bailing out failing firms in a market economy. However, the impact that these salary caps will have is obvious: Bailed-out firms will not be able to keep or hire top-level executive talent. The pay cuts will virtually ensure continued mediocre performance from the quasi-government companies as any talented workers who were left at these firms are now sure to leave in favor of other opportunities. Perhaps the administration’s agenda is to ensure that the companies under its control operate as inefficiently as government itself.

Geoffrey Lawrence

Geoffrey Lawrence

Director of Research

Geoffrey Lawrence is director of research at Nevada Policy.

Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission.  Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association.

From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society.  Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics.  He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation.

Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke.  He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.