I didn't write what follows. It was written by my friend and fellow blogger Dennis Howlett, whose work and mine (along with that of the great Francine McKenna) is now available in consolidated form on a new blog called Called2Account. But it's so good I'm just going to borrow it and hope Dennis doesn't mind: he's not usually up at this time of the morning to ask.

As legislators and politicians scramble for a solution to the US's self inflicted financial markets crisis it seems a key stumbling block is executive compensation. According to the Wall Street Journal:

Mr. Paulson has argued that pay limits shouldn't be part of this plan because they could discourage firms from participating. Treasury is also arguing that it isn't feasible to expect thousands of companies to change their executive compensation structure just to participate in the program and says such a move would discourage small banks and credit unions from participating. Some lawmakers are looking to call Mr. Paulson's bluff, thinking that many institutions would find the choice between limits on executive pay and bankruptcy an easy one. But Treasury is insisting that is a false choice and that the program isn't aimed at preventing firms from filing for bankruptcy but is instead supposed to help relieve pressure on firms that are being weighed down by a glut of assets they can't sell.

Punish? Why not? The choice is self evident. Apply curbs and still get well remunerated. Or be out of a job with nowhere to go. It doesn't take a rocket scientist to see that. Except when you're sat in the middle of a crisis. Judgments quickly become clouded.

Interestingly, the WSJ also notes:

C. Fred Bergsten, director of the Peterson Institute for International Economics, called the package essential, given the unusual circumstances. He predicted taxpayers would ultimately be on the hook for about $100 billion, once the government resells the securities it plans to take off financial firms' hands.

That's not as bad as it sounds. The US tax gap is speculated to run at some $300 billion. If the US government gets serious about closing the gap as an integral part of measures to shore up the financial services industry then that potential loss is well covered. Somehow I doubt that will be top of mind, even though the US government can leverage this crisis to scurry through a spending budget they see as appealing to voters ahead of the US election.

Either way, it will be a fudge and Main Street USA is going to be in for a tough time.