The Wall Street Journal today reported that the Obama administration is seeking to overhaul the private compensation practices within the Financial services industry. The sweeping overhaul would affect banks that did and did not receive TARP funds.

Obama seeks to direct the entire sector on how much it can compensate employees so that it cannot affect the solvency of the institutions. Additionally, Barney Frank is developing legislation that would allow the federal government the ability to monitor compensation and incentives paid to financial services employees.

According to the WSJ report, banking regulators already have the power to review and intervene on excessive compensation structure; since 2007 regulators have intervene 15 times.

The framers of the U.S. constitution never intended government to take on this role. The Obama administration continues to take baby steps toward the direction of state-run banks. Should banks capitulate to these seemingly harmless intrustions into their private business, they will never be able to get them reversed. Socialism is a slippery slope and we must fight back the authoritarian at every step of the way.

About the Author

Michael Bordash

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