The rules according to Tim Geithner: Rule #1 is there are no rules. Last month when the AIG bonus feeding frenzy was boiling over he assured the firms he was trying to lure into the toxic asset-buying program, “The comp conditions will not apply to the asset managers and investors in the program.” Today the Washington Post reports:
Treasury Department lawyers have determined that firms participating in a $1 trillion program to relieve banks of toxic assets could be subject to limits on executive compensation, contradicting the Obama administration’s previous public position, according to a report to be released today by a federal watchdog agency.
Really, at this point any CEO who agrees to do business with the government should be fired. If he signs up with the government, he in essence is turning over control of his company to political operatives who bounce from position to position like ping pong balls. Public opinion squawks, they jump and the rules are different. This is the worst form of statist intervention — lawless and unpredictable. It operates outside any published regulatory regime or statute and without regard even for a gentleman’s promise. No business can operate successfully this way; the entire financial sector of our economy certainly cannot.
At some point Congress might want to recover its collective constitutional manhood, reclaim the role as maker of impartial and fixed rules under which everyone operates, and cease ceding its oversight and lawmaking authority to a treasury secretary whose fickleness knows no bounds.