Obama Continues Assault On The Free Market… Wants to regulate financial industry even further…

I guess the drive to Nationalize the US economy continues. Obama does not seem to care that the very essence of the free enterprise system, aka free market economy, aka capitalism is that folks can decide what their labor is worth, and go find someone who will pay them for it.

As if stirring up popular sentiment which led to the House passing a bill that levys 90% taxation against executive bonuses of individuals working at companies that received TARP money, and using mobs to intimidate same individuals was not sufficient, Barack Obama wants to regulate the entire financial services industry to down to the ways and means the last dollar of compensation is paid NYT

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said.

The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies, which already report about some executive pay practices to the Securities and Exchange Commission. Last month, as part of the stimulus package, Congress barred top executives at large banks getting rescue money from receiving bonuses exceeding one-third of their annual pay.

Beyond the pay rules, officials said the regulatory plan is expected to call for a broad new role for the Federal Reserve to oversee large companies, including major hedge funds, whose problems could pose risks to the entire financial system.

Alas, it seems that Barack Obama also doesn’t seem to care that the USA is not the only place in the world where financial services companies can base their operations, and many are willing to “leave town” FT

Senior executives on both sides of the Atlantic on Friday warned of an exodus of talent from some of the biggest names in US finance, saying the “anti-American” measures smacked of “a McCarthy witch-hunt” that would send the country “back to the stone age”.

Vikram Pandit, Citigroup’s chief executive, told employees in a memo that some anger about executive compensation was “warranted”. But he hit out against the idea of a special tax. “The work we have all done to try to stabilise the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees,” he wrote.

“There are three big industries where the US has global leadership: financial services, media and technology. Introducing this 90 per cent tax is like taking one of those industries out the back and shooting it,” said a top Wall Street executive.

“Commodity traders are already moving to companies like BP where they can make as much money as they used to,” said another banker at a US firm.

Bankers at Deutsche Bank said it could benefit from the proposed legislation by poaching its US rivals’ most talented employees.

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