Should we give incentive bonuses to Wall Street Watchdogs?

I have fixed feelings about this, and I will explain why a little further down.

An Article in the New York Times Dealbook Column asks a question whether Wall Street Regulators or Watchdogs should get performance bonuses.

Maybe someone deserves a bonus.
Like someone who sniffs out the next Bernie Madoff. Or jousts with tomorrow’s gonzo bankers. Or defuses the Next Big Crisis in whatever Next Big Thing is dreamed up by Wall Street.
Someone, in short, who regulates.
It is clear that the nation’s financial regulators were no match for Wall Street last time. The financiers were always one step ahead. But maybe that isn’t surprising. The financiers, after all, have a big incentive to outsmart the financial police. It is called a bonus. Wall Street lures a lot of bright minds with money. How can federal agencies compete? They can’t.

So, of course, The Government of Singapore’s head honcho says we ought to incentivize watchdog process.

Tony Tan Keng Yam, deputy chairman and executive director of the Government of Singapore Investment Corporation, suggested that one reason American regulators fell down on the job was that they were paid too little.
“You must have as good people working in the government in the regulatory authorities as those that are working in the private sector,” Mr. Tan said. “You do need, particularly in these very difficult times, capable people in central banks, in government, in the Treasury who can effectively supervise.”
Mr. Tan knows about this firsthand. He is a former regulator himself, and Singapore has a different view about compensation.
“We pay our politicians and our government servants very well,” he said. “We lock remuneration to the market.”
While Singapore’s watchdogs aren’t paid enough to afford private planes, some in top positions make seven-figure salaries.

At first blush, this would seem to be a great idea; however, if you think about it closely, this would not be such a good idea. Because of the following:

Some at Davos thought the bonus idea could work. But anxiety over that approach was palpable. “They already treat us like criminals,” one hedge fund manager said.
A few said giving bonuses to regulators would be like giving bonuses to the police for issuing speeding tickets. Maybe the regulators, like Wall Streeters, would start thinking about the money, rather than what is right. But maybe that’s exactly what Wall Street needs to slow down.

I must say, that I highly disagree with this idea. Why? While I believe that moderate regulation is a good idea on Wall Street; I believe that incentivizing the Wall Street watchdog process will result in a overzealous regulatory process, that will be solely based upon monitory compensation. This would be absolutely disastrous to the free market process in America. As well all know we already law enforcement that borderlines upon a police state. Doing this to Wall Street would cause a fear mentality amongst the financial sector and discourage investment.

We need regulation, not a financial police state.

Groundhog Bites Man?

Some days it does not pay to get out of bed. As Mayor Bloomberg found out.

Mayor Michael Bloomberg paid a visit to an apparently-disgruntled constituent nicknamed ‘Staten Island Chuck’ on Groundhog’s Day — and got bit for his trouble.
Staten Island’s famous groundhog, Charles G. Hogg, inexplicably bit Mayor Bloomberg during his annual holiday ceremony on Monday, drawing blood from the billionaire.
Said Bloomberg spokesman Stu Loeser: “It nicked his hand.”
Bloomberg wrapped the cut with a napkin until he could check with his doctor.
He was told there was no risk of rabies. The 2-year-old animal was born and raised in captivity and has had no interaction with other animals.
via Groundhog bites Bloomberg at ceremony — Newsday.com.

I bet that had to smart. Ouch!

Others: Political Machine and Don Surber

Random cute picture of the day

Yes, I am doing this:

moar funny pictures

Yes, I made it. 😀

New York Times turns on Daschle appointment

Now this is a switch! It seems that the cheerleader section for the Obama Administration has basically thrown one of their own under the bus. How quaint.

Via the Ol’ Gray Lady:

When President Obama nominated former Senator Tom Daschle to be his secretary of health and human services, it seemed to be a good choice. Mr. Daschle, as the co-author of a book on health care reform, knew a lot about one of the president’s signature issues. As a former Senate majority leader, he also knew a lot about guiding controversial bills through Congress, where he remains liked and respected by former colleagues.
Unfortunately, new facts have come to light — involving his failure to pay substantial taxes that were owed and his sizable income from health-related companies while he worked in the private sector — that call into question his suitability for the job. We believe that Mr. Daschle ought to step aside and let the president choose a less-blemished successor.
Mr. Daschle’s tax shortfall is particularly troubling because it comes on the heels of another nominee’s failure to pay taxes due. We were not pleased when the president’s Treasury secretary, Timothy Geithner, admitted that he had failed to pay tens of thousands of dollars in federal self-employment taxes while working for the International Monetary Fund despite having signed paperwork acknowledging the obligation.
Now we are confronted with an even larger lapse by Mr. Daschle, who failed to pay $128,000 in taxes, primarily for personal use of a car and driver provided to him by a private equity firm for which he consulted. Although the firm — headed by a major Democratic donor — had not issued a form 1099 for the value of the car service, Mr. Daschle said he became concerned last June that he might owe taxes on it and instructed his accountant to investigate. Neither was concerned enough to actually pay the taxes.
[……]
In both the Geithner and Daschle cases, the failure to pay taxes is attributed to unintentional oversights. But Mr. Daschle is one oversight case too many. The American tax system depends heavily on voluntary compliance. It would send a terrible message to the public if we ignore the failure of yet another high-level nominee to comply with the tax laws.
[…..]
Mr. Daschle is another in a long line of politicians who move cozily between government and industry. We don’t know that his industry ties would influence his judgments on health issues, but they could potentially throw a cloud over health care reform. Mr. Daschle could clear the atmosphere by withdrawing his name.

I could sit here and tell you, that I am shocked that the New York Times is turning on this appointment. But honestly? I am not, and I will tell you why. Honesty and integrity go a long way in Government. It would be derelict of me, however not to point out that a few other Senators are guilty of the same thing. Like Al Franken and Charlie Rangel for instance. As this article above says, our tax system, as unfair and heavy handed as it might seem to some, does rely heavily on a voluntary compliance. The question is what kind of message does it sent to the American people, if we have tax cheats in our high ranking offices in the United States Government? Not a very good one, I am afraid.

The real question is; will President Obama heed the advice of the New York Times? Something tells me that he will not, because Obama has said in the past, that he is not going to make decisions based upon what other people think. (Kind of like the guy that proceeded him….) So, it will be interesting to watch this unfold. Obama, the man whom basically the New York Times and other Liberal media outlets elected basically tells those same people to stow it and does what he wants to. Now that will make for some interesting blogging!

Update: It is being reported now, by various outlets that Tom Daschle has withdrawn his name.

Others on the subject: Commentary, Hot Air, , Soccer Dad, Power Line, Riehl World View

(Via Memeorandum)

Off for the night…

I’m beat. See you all when I arise from my slumber.

Daniel Larison on Michael Steele

An interesting point of view

Money Quote:

Curious to see what Steele had to say, I watched the interview he gave on FoxNews, and I can’t say I was all that impressed. To what did he attribute the GOP’s political decline over the last two cycles? Naturally, it was spending. That was it. Spending. It’s not just that he didn’t address the GOP’s failures in foreign policy and its errors in anti-terrorism, which I would have been interested to hear, but that this was the only reason he gave, which suggests that he thinks the main solution to GOP woes is to come out against spending (unless, of course, it relates to “defense”).

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