I was educated in classical economics during six years of business school and for almost two decades have been a company owner and business consultant. Given this background I held strong convictions about the markets and government’s intervention.   To my astonishment, my reaction to recent events falls contrary to what I would have expected my response to be a mere six months ago.

In reading about the limits on executive pay set forth by congress I would have been in utter disgust as I saw government crossing the line in dictating what should be left to the markets and shareholders to decide. In the past I would have cried socialism and endorsed anyone speaking against this incestuous move into the free market system. However, today while reading an article written in the Washington Post, I found myself aligned with those that I would have previously looked at from across the aisle.

In the article Scott Talbott , chief lobbyist for the nation's largest financial services firms states "It undermines the current incentive structure." http://www.msnbc.msn.com/id/29192298/page/2/  In reading this comment the first thing I immediately noted was his title, ‘chief lobbyist for the nation's largest financial services firms’ and discounted his statement as trying to maintain the threatened good-old-boys network that has been a constant staple since the beginning of the financial markets. My next response was—yes it does, and that is a good thing because the current incentive structure is wrong.

As I read the next rebuttal against pay cap ‘A common argument from executives against reining in huge Wall Street bonuses is that it would cause the most talented to flee to hedge funds and private equity groups. The free market, they say, should dictate pay levels’. This comment induced yet another visceral reaction; this one being the most surprising. I asked whether that was really a bad thing? It appears that these ‘most talented’ made a mess of our financial system with highly complicated financial instruments that even the best minds cannot unravel. It is a pale argument that we need to continue to pay high compensation packages to keep them around.