Pay Compensation Restrictions, Cash for Clunkers, Health Care Reform

Are the power mad Democrats over reaching? Don't get me wrong, President George W. Bush helped create the mess. The Dems are just adding fuel to the fire.

The federal government shouldn't have bailed out financial institutions to begin with. They made bad business decisions and took on dumb risks. They got exactly what they paid for. A mess. But Uncle Sam's deep pockets lent them the money to stay afloat. High risk, bad decisions were still rewarded.

Don't get me wrong. I think there must be some government regulation of banks, business and capital. The beauty of free market capitalism though is that good decisions and business ideas are rewarded. If someone creates a service or product others are willing to pay for then they are rewarded with sales and profit. If they come up with something folks don't want then the business fails. It's almost that simple.

Government regulation now is trying to go to far. The Democrats want to limit Wall Street pay and bonuses. I think this is just a bad idea. According to the article:

The legislation's ban on risky compensation would apply to any firm with more than $1 billion in assets, including bank holding companies, broker-dealers, credit unions, investment advisers and mortgage buyers Fannie Mae and Freddie Mac.

The problem becomes who in government gets to decide what's risky and what's not? Also the $1 billion number is more than likely an arbitrary number the picked because it sounds so big. There is no economic theory to suggest limiting risk by companies over $1 billion in assets would improve or prevent the current mess. There really is no rhyme or reason for the House's bill.

I'm not even sure why there is a Cash for Clunkers program funded by the federal government. The program is supposed to help subsidize cars purchases for those who purchase a new car with significantly higher mileage. The House has approved $2 billion more for the program. Then again with a $1 trillion deficit what's another $2 billion among friends?

Finally, this health care overhaul needs to slow down drastically. In my idealistic youth I believed everyone should have access to health care. I still do but we have to figure out a way to pay for it. Sensibly. President Barack Obama and the Congress wanted to have a bill signed into law before the summer Congressional recess. Reportedly the bill was over 1,000 pages. Can anyone honestly say they've read it, understand it and know the true cost of it? Absolutely not. It's probably a hodgepodge of ideas piled on top of one another. Every legislator more than likely put in his request for favorite ideas and programs. I truly doubt a bill so hastily put together will improve the health care system or lower costs. Something this mammoth needs a good study by experts in the field and in economics and not a bunch of Congressional aides piece mealing a bill into law.