A step in the right direction.

The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, according to people familiar with the plan...

Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends. President Obama and Treasury Secretary Timothy F. Geithner plan to announce the executive compensation plan on Wednesday morning at the White House....

Executives at companies that have already received money from the Treasury Department would not have to make any changes. But analysts and administration officials are bracing for a huge wave of new losses, largely because of the deepening recession, and many companies that have already received federal money may well be coming back....

"That is pretty draconian — $500,000 is not a lot of money, particularly if there is no bonus," said James F. Reda, founder and managing director of James F. Reda & Associates, a compensation consulting firm. "And you know these companies that are in trouble are not going to pay much of an annual dividend." (Emphasis added.)
Mr. Reda said only a handful of big companies pay chief executives and other senior executives $500,000 or less in total compensation. He said such limits will make it hard for the companies to recruit and keep executives, most of whom could earn more money at other firms.

"It would be really tough to get people to staff" companies that are forced to impose these limits, he said. "I don't think this will work."

Let's all prepare a slice of cheese for Mr. Reda, to go with his whine.

Now, it wouldn't be me if I didn't share with you that some of my friends are quite skeptical about this proposal, and I'm waiting on an explanation that my simple, noneconomist mind can understand, about what's "bad" in the proposal. I'm also gloomy enough to believe that such a provision has little chance of passing...yet.

But I will give props to Obama for at least testing this with a trial balloon. This is a conversation we really need to have more often, especially in circles where Mr. Reda lives. It's clear he, and many of his ilk just don't understand: no one deserves riches for massive FAILure. Pushing the Overton Window, I, like Maxine Waters, don't believe that anyone should be paid more than 25x the salary of the least compensated employee of any organization. Right now, thinking like that is "crazy talk." But only in the Village; my many conversations with Libertarians and populist conservatives reveals to me that there is truly no love among the rabble for the private jet and country club set. Obama may be a slow learner, but at the rate he's failing to make Village Logic work for him, he may come around as a populist sooner than I thought. For all we (rightly) bash him for his wrong decisions, it's important to let him know that we are True Progressives and Liberals, and our capacity to open arms to those who've sinned and repented, and taken steps down the Path, is boundless.