One area of concern pertains to economic issues.  Does the government really have the information by which it makes good decisions that regulate labor markets?  More importantly, does it have the moral integrity and fortitude to legislate matters and limit executive pay fairly for the good of all?  Clearly, there are doubts on both fronts so that it is hard, if not impossible, to answer either of these questions with an unqualified yes.

A related area of concern pertains to the encroachment on individual liberties, especially property rights.  For some time the United States has seen limits imposed on the freedoms of the individual, and these infringements have been speeding up.  Even if one believes that the caps imposed on these executives are proper and fair, where will government interventions end?  It is by no means clear that this behemoth has the discipline to respect any property rights of the individual.  And it puzzles the imagination to figure out what institutions exist to rein in this beast if it continues to malign human freedoms.  The United States is clearly on the road to greater socialism.

And these two concerns lead to the most frightening: the increased power of the central administration.  Does the U.S. government really have the authority to intervene in the way it has with respect to banks and other institutions that have received bailout funds?  If so, where does the power end and what countervailing forces exist to keep the current and future presidents from abusing their power?

One small comfort is that more Americans are thinking about such issues.  A Gallup Poll in September found that 57% of the respondents felt that the government is “doing too much” while only 38% said that it “should do more.”  Of course, these thoughts need to translate into actions before it is too late to restrain Washington politicians and bureaucrats.

Having said this, I find it amusing to hear the arguments of bank managers and directors.  Their major complaint is that the administration’s cap on executive salaries will drive talent away.  That is such a self-centered argument!  If they cannot live comfortably on $500,000 per year, then I really feel sorry for them.

But wait—aren’t these the same guys who misunderstood the nature of the derivative instruments that their firms were dealing in?  And didn’t these managers make faulty decisions with respect to the housing market and counter-party risk?  In short, didn’t these executives bring their own firms to the brink of destruction?  Given the foolish and reckless behaviors of these managers, one has to ask what talent they are talking about.  If this is talent, let’s given some untalented people the chance the run these companies.  They couldn’t do worse.

Besides, where would these executives go?  Before these talented people leave their firms, they would desire other positions with salaries greater than $500,000.  I doubt that there are enough open positions that pay that much for so many executives.  The labor market is slim for this end of the pay spectrum.

And there are other people who could easily replace these businessmen and who could do a credible job.  For example, competent university presidents must have great managerial skills.  With a median salary of $427,400, some of them might be willing to accept the new challenges of running a bank.  And take a pay boost.

There are several legitimate concerns about Obama’s intervention into the pay of bank managers and others who accepted government bailouts.  But, concern over the flight of talent is not one of them.