“Too many cooks spoil the broth.” That’s common wisdom. So, will too many czars spoil the administration?
President Barack Obama recently introduced Kenneth Feinberg as America’s “compensation czar.” He’ll oversee executive pay at firms that have taken federal bailout money. Feinberg “will have broad discretion to set the salaries and bonuses for their five most senior executives and their 20 most highly paid employees,” The New York Times reported.
Timothy Geithner explained why the administration wants a compensation czar: “This financial crisis had many significant causes, but executive compensation practices were a contributing factor,” the Treasury secretary announced. “Incentives for short-term gains overwhelmed the checks and balances meant to mitigate against the risk of excess leverage.”
That’s true as far as it goes. But it’s also true that, in a free market, companies that emphasize short-term gains over long-term success tend to go out of business. That’s the way it should be. When that happens, short-sighted executives end up unemployed.
Yet it’s the administration that’s helping prop up failing companies.
All the entities that will be directly subject to Feinberg’s dictates received federal bailout money. All were supposedly “too big to fail,” including American International Group, General Motors and Citigroup. None would need a compensation czar if the Obama administration would simply let these failing firms file for bankruptcy protection like countless other firms before them.
Feinberg is just the latest in a dense line of Obama czars. It’s hard to keep track of exactly how many czars he’s crowned in these first few months in office, but a quick scan through media reports reveals at least a dozen. Even liberals are becoming wary. “Does anyone know ANYTHING about these people? Guess what? That’s the point,” wrote a blogger on the liberal Web site Salon.com. “It’s easier to ‘get things done’ when you are anonymous.” Indeed.
Some czars include:
* Daniel Fried, Gitmo Closure Czar. The Miami Herald reports his job will be to, “persuade European countries as well as Yemen to take back some of the 240 or so long-held prisoners.” Good luck on that. France recently agreed to take one prisoner. Italy says it will take three. Only 236 to go!