President Obamanable, one of the vast majority of people (and almost certainly one of the all but one¹ who served in Congress) who has obviously never read Henry Hazlitt’s Economics in One Lesson, has now imposed a maximum wage on what an executive can earn working at a bank that is being bailed out by the Federal government—bailed out, that is, with our coerced tax dollars and Fed-created dollars (which will, of course, lower the value of our already low-valued fiat currency–what economists call a “hidden” tax on taxpayers).

“President Barack Obama on Wednesday imposed $500,000 caps on senior executive pay for the most distressed financial institutions receiving federal bailout money, saying Americans are upset with “executives being rewarded for failure.””

As a perfect example of “the opposite side of the same coin” phenomenon, just as a minimum wage produces the unintended consequence of forcibly excluding from the marketplace those workers whose subjective value to a prospective employer is worth less to the employer than the minimum wage, a “maximum” wage will produce the unintended consequence of forceably excluding those executives who might be the most qualified to straighten out the mess at a bailed out bank from actually working at one of those banks. Why? Because those excluded executives whose bank management skills the market has determined are worth more than the $500,000 per year that President Obamanable has “objectively” determined that their labor is worth will now look elsewhere for a job that can pay them more than $500,000 per year.

[Speaking of objective versus subjective value, perhaps our current Puppet-in-Chief should take the time to read Carl Menger’s Principles of Economics to understand why all value is subjective, including the economic worth of a product or service.]

Of course, one could argue that since the government is giving the banks the money, the government has the right to set the guidelines as to how the money is to be allocated. This is absolutely true–if the government had obtained the money voluntarily and not by coercive taxation or printing press inflation. Therefore, since this ill-gotten bailout money should never have been in the government’s possession to begin with, a claim that it is the government’s money and should therefore have the right to set guidelines in terms of how the money is to be allocated by the banks would be based on a false premise.

¹Ron Paul