We’ll tell you what you’ll make

On his Wall Street Journal blog, Stephen Grocer noted last week: "Wall Street compensation is once again making headlines. The U.S. pay czar, Kenneth Feinberg, will push to renegotiate contracts that he views as excessive or seek other ways to reduce overall outlays at institutions receiving big dollops of federal aid, the Wall Street Journal reported Monday.

"That followed closely on the heels of a WSJ article regarding Citigroup trader Andrew J. Hall and his push for the financial giant to honor a 2009 pay package that could total $100 million."

Mr. Hall is the head of Phibro, Citigroup's energy-trading unit, which occasionally accounts for a disproportionate chunk of Citigroup income. Citigroup, needless to say, is one of the firms that received federal aid. The troubled bank is contractually obligated to pay Mr. Hall based on Phibro's profits, and Phibro has been highly profitable for Citigroup -- enough so that a number of people believe Citigroup stands a better chance of repaying the U.S. money with its Phibro unit humming.

But considering that Citigroup would have failed had it not been for the government rescue of the company, critics argue that such pay contracts are fair game for renegotiation in hard times.

But this ducks the larger question: What the heck is a federal "pay czar" doing setting compensation levels in private companies, and where might such a -- what shall we call it, "constitutionally novel"? -- precedent lead.

Yes, the government claims to be limiting Mr. Feinberg's field of fire to firms that have received federal bailout funds ... for now. But in this day and age, with the federal government meddling in every segment of the economy, who can claim not to have received some "equivalent federal benefit" somewhere along the line?

If the federal government maintains the air traffic control system, couldn't that be held to be "the same as" a financial handout to the airlines? If pharmaceutical firms are going to make profits based on government-funded medical research -- and if their biggest customer is tax-funded Medicare -- might it not soon be deemed "only fair and a matter of fiduciary responsibility" for the pay czar to make sure those profits aren't being "wasted on obscenely disproportionate executive salaries"?

It sounds a little like economics on the model of Mussolini's fascist Italy, especially when such powers are concentrated under one man, essentially free of congressional or constitutional oversight.

The speed with which Mr. Obama and his statist followers have moved to impose centralized "command and control" economics is breathtaking.