The Volokh Conspiracy - Treasury says it may break its promise to businesses.

I watched Tim Geithner in his Congressional testimony assure businesses that they would NOT be subject to the compensation restrictions if they participated in the asset-buying program.

Yesterday Charlie Gasparino reported that big investors were reluctant to participate in the public-private partnership because they were afraid of having their compensation restricted or being called before Congress to justify why they made money. I thought the investors' caution understandable, but given Geithner's explicit promise, it seemed perhaps a tad excessive. Surely Geithner's word must be worth something.

It turns out I was wrong.

Jennifer Rubin nails this one (tip to Instapundit):

The rules according to Tim Geithner: Rule #1 is there are no rules. Last month when the AIG bonus feeding frenzy was boiling over he assured the firms he was trying to lure into the toxic asset-buying program, "The comp conditions will not apply to the asset managers and investors in the program." Today the Washington Post reports:

Treasury Department lawyers have determined that firms participating in a $1 trillion program to relieve banks of toxic assets could be subject to limits on executive compensation, contradicting the Obama administration's previous public position, according to a report to be released today by a federal watchdog agency.

Really, at this point any CEO who agrees to do business with the government should be fired. If he signs up with the government, he in essence is turning over control of his company to political operatives who bounce from position to position like ping pong balls. Public opinion squawks, they jump and the rules are different. This is the worst form of statist intervention — lawless and unpredictable. It operates outside any published regulatory regime or statute and without regard even for a gentleman's promise. No business can operate successfully this way; the entire financial sector of our economy certainly cannot.

Rubin refers to a "gentleman's promise." Yet this assumes that Tim Geithner is a gentleman; every day he is becoming more and more like a character from an Ayn Rand novel.

	[Jim Lindgren, April 23, 2009 at 11:06am] Trackbacks Treasury says it may break its promise to businesses. I watched Tim Geithner in his Congressional testimony assure businesses that they would NOT be subject to the compensation restrictions if they participated in the asset-buying program. Yesterday Charlie Gasparino reported that big investors were reluctant to participate in the public-private partnership because they were afraid of having their compensation restricted or being called before Congress to justify why they made money. I thought the investors' caution understandable, but given Geithner's explicit promise, it seemed perhaps a tad excessive. Surely Geithner's word must be worth something. It turns out I was wrong. Jennifer Rubin nails this one (tip to Instapundit): The rules according to Tim Geithner: Rule #1 is there are no rules. Last month when the AIG bonus feeding frenzy was boiling over he assured the firms he was trying to lure into the toxic asset-buying program, "The comp conditions will not apply to the asset managers and investors in the program." Today the Washington Post reports: Treasury Department lawyers have determined that firms participating in a $1 trillion program to relieve banks of toxic assets could be subject to limits on executive compensation, contradicting the Obama administration's previous public position, according to a report to be released today by a federal watchdog agency. Really, at this point any CEO who agrees to do business with the government should be fired. If he signs up with the government, he in essence is turning over control of his company to political operatives who bounce from position to position like ping pong balls. Public opinion squawks, they jump and the rules are different. This is the worst form of statist intervention — lawless and unpredictable. It operates outside any published regulatory regime or statute and without regard even for a gentleman's promise. No business can operate successfully this way; the entire financial sector of our economy certainly cannot. Rubin refers to a "gentleman's promise." Yet this assumes that Tim Geithner is a gentleman; every day he is becoming more and more like a character from an Ayn Rand novel.