The Obama administration's efforts to rewrite the rules of capitalism are getting out of hand.
I understood the clamp down on excessive bonuses paid to banking executives despite such profoundly awful performances that taxpayers had to bail them out. Clearly, capitalism had run amok.
But now Obama wants to dictate the compensation practices of the entire financial services industry, including firms that didn't partake of the government's handouts.
That's going too far. A free market works best when it's free. There are self-regulating elements that come into play. Abusive firms have a way of being exposed and investors punish them. In the case of the financial meltdown, the breakneck pace of events got ahead of the markets. But investors caught up.
One need only look at the what happened to the share prices of the banks, especially those bailed out by taxpayers. And more punishment was doled out by investors to banks whose unseemly bonuses were exposed.
Look at what happened to
(in gray), and
Bank of America
(in blue). Meanwhile,
(in green) held onto more value.
I think investors have spoken. Obama's planned rules are unnecessary. Capitalism is working.
If Obama wants to protect the investor, he should focus his energy on shareholder rights. Prop up the democracy of the investor and halt abuses such as Citigroup's decision to convert preferred shares (including those owned by the government) into common shares without so much as a shareholder vote.
Obama could also look at the way proxy rules give big institutional investors excessive power by aggregating all the votes held by individual investors whose accounts they manage. The votes of individual investors then get drowned out by fund managers who control the game.
Leveling the playing field for individual investors would enable the democratic process to act more swiftly and shore up governance by those with the most at stake.
Heavy-handed meddling by the government isn't going to make the markets safer for investors.
Empowering investors to govern the companies they own is more in line with the American way.
Let's give democracy a chance, shall we?
Hall is the editor of
. Previously, he served as deputy editor and chief innovation officer at
The Orange County Register
and as a news manager at
in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at
in Fort Wayne, Ind. His work also has been published in a variety of newspapers including
The Wall Street Journal
The New York Times
International Herald Tribune
. Hall received a bachelor�s degree in journalism and political science from The Ohio State University and has taken graduate management science courses at Boston University.