{"id":1911,"date":"2009-10-06T05:41:02","date_gmt":"2009-10-06T13:41:02","guid":{"rendered":"http:\/\/hodakvalue.com\/blog\/?p=1911"},"modified":"2012-05-24T16:51:39","modified_gmt":"2012-05-25T00:51:39","slug":"waking-up-to-pravda","status":"publish","type":"post","link":"http:\/\/hodakvalue.com\/blog\/waking-up-to-pravda\/","title":{"rendered":"Waking up to Pravda"},"content":{"rendered":"

This morning’s headline in the Wall Street Journal<\/a> made me wipe my eyes and blink a couple of times to make sure I didn’t wake up in some sort of Kafkaesque twilight zone.:<\/p>\n

\n

Pay Czar Targets Salary Cuts<\/h1>\n<\/blockquote>\n

That appeared right above a headline about how the government wants to restrict gifts to bloggers.\u00a0 Nice.<\/p>\n

Relative to the title of this post, Pravda, of course, would have reported on the glorious plan of a commissar instead of a czar<\/a>, but that is a fine distinction for our purposes.\u00a0 The more relevant distinction is that the pay czar<\/a> story is really two stories.\u00a0 The nominal story is about a government official who has ideas about how individuals in private firms ought to be paid, when most everyone agrees that the way they had been paid is defective<\/a>.\u00a0 It’s stated as a matter of fact problem-solution story.\u00a0 The second, more subtle story, is about a government official harnessing state power to implement his ideas.\u00a0 This is about the unstated premise that it’s a good idea for government officials to implement their good ideas about how people should be rewarded in companies representing a significant chunk of the economy.\u00a0 Those who read the nominal story in its narrow sense will say, “Hey, these measures only apply to firms with significant government investment.”\u00a0 True enough, but that ignores the trend in government intervention in pay practices over the past couple of decades under Republican as well as Democratic administrations.\u00a0 The intent about this pay czar’s reach is clear:<\/p>\n

However, the Obama administration is hopeful that Mr. Feinberg’s pay structure will be viewed as something of a “best practice” and that other firms may voluntarily seek to use similar methods in determining compensation.<\/em><\/p><\/blockquote>\n

And what if firms don’t seek to do so voluntarily<\/a>, and generally shrug off these suggestions as they have every other government suggestion for how to structure the pay of the most sought-after talent on the planet?\u00a0 The trend is not good.<\/p>\n

Kenneth Feinberg is a bright guy.\u00a0 He claims to have the best interest of taxpayer-as-reluctant-owners at heart:<\/p>\n

At a speech before the Chicago Bar Association last week, Mr. Feinberg said he will not have done his job if companies react to his decisions by saying “that’s great, we’re going to lose all our people and we’re not going to be competitive.”<\/em><\/p><\/blockquote>\n

But the commissars who drew up the Soviet five-year plans wanted their companies to succeed, too.\u00a0 They wanted their economies to thrive.\u00a0 They considered it their patriotic duty to insure that success.\u00a0 For many of them, success was literally and personally a matter of life and death.\u00a0 But the commissars failed, and turned Soviet Russia into an economic basket case.\u00a0 Ken Feinberg has never designed a corporate incentive plan<\/a>.\u00a0 He has never had his compensation ideas market-tested.\u00a0 But this morning’s headline reports his intent as if none of these things matter.\u00a0 All that matters is what was stated in the lead, that Mr. Feinberg is “clamp(ing) down on compensation at firms receiving large sums of government aid.”\u00a0 Because the people could not tolerate paying their proxy functionaries so much.<\/p>\n","protected":false},"excerpt":{"rendered":"

This morning’s headline in the Wall Street Journal made me wipe my eyes and blink a couple of times to make sure I didn’t wake up in some sort of Kafkaesque twilight zone.: Pay Czar Targets Salary Cuts That appeared right above a headline about how the government wants to restrict gifts to bloggers.\u00a0 Nice. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,25],"tags":[52],"class_list":["post-1911","post","type-post","status-publish","format-standard","hentry","category-invisible-trade-offs","category-reporting-on-pay","tag-competing-with-izvestia"],"_links":{"self":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/1911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/comments?post=1911"}],"version-history":[{"count":10,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/1911\/revisions"}],"predecessor-version":[{"id":2973,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/posts\/1911\/revisions\/2973"}],"wp:attachment":[{"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/media?parent=1911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/categories?post=1911"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/hodakvalue.com\/blog\/wp-json\/wp\/v2\/tags?post=1911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}