Is occurring much more quickly than I ever would have thought. Uninformed voter anger toward a single group (Wall Street) has been stirred up by the current administration and used as an excuse to dismantle the remaining shreds of competitive advantage and creativity in America.
Do the masses not understand that ‘safety and soundness’ is a ploy to garner support for the de facto nationalization of our financial services institutions?
Should financial institutions have compensation models that outline personal performance rewards for employees based on consideration of risk in equal measure as short-term profits? Of course. Should regulatory authorities be able to outline this objective as guidance? Absolutely. But do we believe that the government is best positioned to step into the workings of a private company and be prescriptive about how to accomplish these goals? This doesn’t feel right under a capitalistic structure.
It is a step toward the demise of capitalism when the government can decide how much an American can make in a particular field. This is a blow against talent attraction. Will the best and brightest want to be in financial services anymore?
And after banking, who’s next? The medical industry is already on the run over the threat of socialized medicine. How will this affect the talent pool of future doctors? If only a small percentage of the population has a particular talent, shouldn’t those people be compensated accordingly? Capitalism rewards scarcity, socialism rewards mediocrity.
And as we strangle the golden goose, let’s wrap ourselves in the warm blanket of isolationism while we’re at it. Punitive international tax laws may bring in a few extra dollars in tax revenue, but will destroy the appetite companies have for outsourcing, off-shoring, or conducting business internationally. It will only be a matter of time before other countries respond in kind, driving a stake through the heart of any meaningful recovery.
Smart people have lots of options and the intelligence to know when they’re not wanted. Driving talent out of critical professions and industries through arbitrary government intervention is profoundly shortsighted and tragically devoid of common sense.