The Junior Partner

Former Majority Leader Dick Armey had a plethora of quips, axioms and country song lyrics he used to conjur up at the appropriate times to describe or properly illustrate situations. One such axiom was, "If you make a deal with the devil, there's no question who the junior partner is."

This is true even if we change it a little to reflect something going on today. Which is to say, "If you make a deal with the government, there's no question who the junior partner is." An example of this is the limiting of executive pay for those companies receiving TARP funds. While it is pleasing to the ear, makes us feel good and appeals to our populist bent, it's also stupid.

Now, let me get something straight right away, I've never made $500,000 in one year and to most Americans it sounds like a heck of a paycheck if you can get it. I also make no excuses for the lack of leadership or backbone some executives have shown in running their companies. Yet, there is something to be said about the pressures executives are under from members of their board and shareholders to keep up with the next guy. Problem is, one of the next guys was Bernie Madoff and we found out how he rolled.

This isn't to excuse bad behavior. My parents always told me two wrongs don't make it right. My Dad also used to tell me that sometimes, "it's good enough for government work." This, from a guy who never worked for the government in his life. Thing is, senior executives in major corporations in the U.S. can not be satisfied with good enough for the government - they'd be run out on a rail by their boards and shareholders. In the end, I don't excuse the behavior, but I understand the pressure to perform.

The fact is, much of what is happening to our economy right now is and was beyond their control, but we as Americans want someone to blame. So executives are being forced to give up a sizeable portion of their income and slip on the yoke of government.

The question I have is, what about the government regulators or members of Congress who failed in their duty to oversee financial or housing markets? What about the legislators who admonished those looking into Fannie Mae and Freddie Mac to make sure they weren't making too many bad loans? Even with clear warnings as to what the problems were, they still failed to act - or worse, they refused to act. What yoke will they be forced to wear? Will they lose their jobs or be forced to sacrifice a significant amount of their income as well?

Nope. They are the senior partner, and they got a raise this year.