A $500,000 Salary Limit

President Obama wants to cap salaries of senior executives at institutions getting significant government aid at a half-mil. And now comes the whine and cheese.

"That is pretty draconian -- $500,000 is not a lot of money, particularly if there is no bonus," said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. "And you know these companies that are in trouble are not going to pay much of an annual dividend."

I think Mr. Reda and his fellow fat cats are going to lose this one. First, there is a crisis of confidence in just about everyone in those who have been running Wall Street. Most people including those who have seen their investment vanish and their houses foreclose cannot comprehend how firms that have lost billions of dollars deserve to be run by people getting millions of dollars. Secondly, I challenge the assumption that talent at the top of any pyramid is non-fugible. To the contrary, those who rise to the top of the bureaucracies manifestly do not do so because they have the interest of the shareholders or the public in mind but because they are trying to promote their interest through gamesmanship and risk taking. Perhaps these companies need to return to the ethic of the organization man-- not the financial rodeo clown.

During World War II, the top business leaders swung into action managing vast organizations, sometimes for a token one dollar a year. Perhaps it is that shift of incentive from greed to patriotism that may help restore confidence in our economy.

In my younger days, I preached from many a soap box that capitalism is the hope of the world. That has turned out to be a false faith. That doesn't mean that I embrace socialism or any other kind of economic faith. But no longer will I assume that the invisible hand is the most moral or even the most productive hand.