Former Congressional Budget Office Director Douglas Holtz-Eakin hits the nail on the head:
No matter how bad you think market capitalism is, the federal government has proved it is worse. Congress originally banned these very bonuses, then stripped the ban out of the stimulus bill and is now threatening confiscatory taxes on the lawful recipients. The Treasury knew about the bonuses and vouched for their legality but now wants double the money back somehow. How, exactly, the Treasury expects any straight-thinking financial entity to enter into a voluntary public-private “partnership” to solve the financial crisis given this track record is a mystery to me.
Indeed.
This mini-drama exposes exactly why socialism does not work. The private sector depends on the willingness of people to invest in their education and take risks on the chance that they will be handsomely rewarded, versus playing it safe and being a Metro bus driver with a nice retirement package. The masses who do not take risk despise the high compensation of those who do, with little appreciation for the fact that the highly compensated tend to work much longer hours, invest much more in their education, and have no security net. Many of those who risk all end up with nothing, while the government worker is assured of a comfortable retirement with generous health benefits and almost complete job security.
I fear that Obama is creating an economic climate in which it is a safer bet to be a government employee than it is to start a business and try to create jobs and wealth. If that is true we will be 1950’s India where the best and brightest fought to get civil service jobs. Imagine if Larry Page and Sergey Brin worked at the DMV instead of creating Google. Is that the type of country we want to have?