Mark Calabria notes how the form of salary scheme at financial institutions played no apparent role in sparking the financial crisis. But that hasn’t stopped the federal pay czar from boasting about his power, even to regulate compensation set before he took office.

Reports the Martha’s Vineyard Times:

Speaking to a packed house in West Tisbury Sunday night, Kenneth Feinberg rejected the title of “compensation czar,” but he also said said his broad and “binding” authority over executive compensation includes not only the ability to trim 2009 compensation for some top executives but to change pay plans for second tier executives as well.

In addition, Mr. Feinberg said he has the authority to “claw back” money already paid to executives in the seven companies whose pay plans he will review.

And, he said that if companies had signed valid contractual pay agreements before February 11 this year, the legislation creating his “special master” office allowed him to ask that those contracts be renegotiated. If such a request were not honored, Mr. Feinberg explained that he could adjust pay in subsequent years to recapture overpayments that were legally beyond his reach in 2009.

This isn’t the first time that federal money has come with onerous conditions, of course. But it provides yet another illustration of the perniciousness of today’s bail-out economy.

Since the June House vote on the Waxman-Markey “cap-and-trade” bill, lawmakers from both chambers have backed significantly away from the legislation. The first raucous “town hall” meetings occurred during the July 4 recess, before health care. Voters in swing districts were mad as heck then, and they’re even more angry now. Had the energy bill not all but disappeared from the Democrats’ fall agenda, imagine the decibel level if members were called to defend it and Obamacare.

But none of this has dissuaded the editorial boards of the The New York Times and Washington Post. Both newspapers featured uncharacteristically shrill editorials today demanding climate change legislation at any cost.

The Post, at least, notes the political realities facing cap-and-trade and resignedly confesses its favored approach to the warming menace: “Yes, we’re talking about a carbon tax.” The paper—motto: “If you don’t get it, you don’t get it”—argues that in contrast to the Boolean ball of twine that is cap-and-trade, a straight carbon tax will be less complicated to enforce, and that the cost to individuals and businesses “could be rebated…in a number of ways.”

Get it? While ostensibly tackling the all-encompassing peril of global warming, bureaucrats could rig the tax code in other ways to achieve a zero net loss in economic productivity or jobs. Right. Anyone who makes more than 50K, or any family at 100K who thinks they will get all their money back, please raise you hands.

The prescription offered by the Times, meanwhile, is chilling in its cynicism and extremity. It embraces the fringe—and heavily discredited—idea of “warning that global warming poses a serious threat to national security.” It bullies lawmakers with the threat that warming could induce resource shortages that would “unleash regional conflicts and draw in America’s armed forces.”

(Note to the Gray Lady: This is why we have markets. Not everyone produces everything, especially agriculturally. For example, it’s too cold in Canada to produce corn, so they buy it from us. They export their wheat to other places with different climates. Prices, supply, and demand change with weather, and will change with climate, too. Markets are always more efficient than Marines, and will doubtless work with or without climate change.)

Appallingly, the piece admits that “[t]his line of argument could also be pretty good politics — especially on Capitol Hill, where many politicians will do anything for the Pentagon. … One can only hope that these arguments turn the tide in the Senate.” In other words: the set of circumstances posited by the national-security strategy are not an object reality, but merely a winning political gambit.

There’s no way that people who see through cap-and-trade are going to buy the military card, but one must admire the Times’ stratagem for durability. Militarization of domestic issues is often the last refuge of the desperate. How many lives has this cost throughout history?

Nevertheless, one must wonder at the sudden and inexplicable urgency that underpins the positions of both these esteemed newspapers. Global surface temperatures haven’t budged significantly for 12 years, and it’s becoming obvious that the vaunted gloom-and-doom climate models are simply predicting too much warming.

Still, one must admire the Post and Times for their altruism. The economic distress caused by a carbon tax, militarization, or any other radical climatic policy certainly won’t be good for their already shaky finances, unless, of course, the price of their support is a bailout by the Obama Administration.

Now that’s cynical.

Earlier this summer, the House of Representatives approved legislation intended to, as Rep. Frank, put it, “rein in compensation practices that encourage excessive risk-taking at the expense of companies, shareholders, employees, and ultimately the American taxpayer.”

While there are real and legitimate concerns over CEOs using bailout funds to reward themselves and give their employees bonuses, Washington has operated on the premise that excessive risk-taking by bank CEOs, due to mis-aligned incentives, caused, or at least contributed to, the financial crisis. But does this assertion stand up to close examination, or are we just seeing Congress trying to re-direct the public anger over bailouts away from itself and toward corporations?

As it turns out, a recent research paper by Professors Fahlenbrach (Ecole Polytechnique Federale de Lausanne) and Rene M. Stulz (Ohio State) conclude that “There is no evidence that banks with CEOs whose incentives were better aligned with the interests of their shareholders performed better during the crisis and some evidence that these banks actually performed worse…”

Professors Fahlenbrach and Stulz also find that “banks where CEOs had better incentives in terms of the dollar value of their stake in their bank performed significantly worse than banks where CEOs had poorer incentives. Stock options had no adverse impact on bank performance during the crisis.” While clearly many of the bank CEOs made bad bets that cost themselves and their shareholders, the data suggests that CEOs took these bets because they believed they would be profitable for the shareholders.

Of course what might be ex ante profitable for CEOs and bank shareholders might come at the expense of taxpayers. The solution then is not to further align bank CEOs with the shareholders, since both appear all too happy to gamble at the public expense, but to limit the ability of government to bailout these banks when their bets don’t pay off.

Rose Friedman, co-author of several books with her late husband and Nobel laureate economist Milton, passed away this morning. Rose and Milton co-wrote Free to Choose the wonderful book that formed the basis of Milton’s PBS television series, as well co-writing their joint auto-biography “Two Lucky People.”

She was intimately involved in the school choice movement both before and after Milton’s passing, as co-founder of the Milton and Rose D. Friedman Foundation for School Choice, ably led by Robert Enlow.

Rose and Milton were not just skilled economists who cared about kids, they were a charming couple. At a casual policy event a decade ago, they shared a single armchair to ensure that there would be enough seats for everyone. They weren’t just models of commitment to a worthy cause, they were models for how two smart, forthright people can build a marriage that lasts a lifetime.

Rose and Milton will long be remembered.

Yesterday, President Obama defended his new approach to the war in Afghanistan. According to the president, our strategy is to disrupt, dismantle, and defeat al Qaeda and its extremist allies. In order to accomplish this goal, Obama’s strategy indicates we must create a functioning national state there.

Why?

Beltway orthodoxy tells us it’s because extremists will emerge in ungoverned parts of the world and attack the United States. As my colleagues Justin Logan and Chris Preble point out here, there’s reason to doubt whether state failure or poor governance in itself poses a threat.

But responsible leaders would be upfront about the expected costs of our policy: to transform what is a deeply divided, poverty stricken, tribal-based society into a self-sufficient, non-corrupt, stable democracy would require a multi-decade commitment—and even then there’d be no assurance of success.

Why Afghanistan’s form of governance directly implicates America’s security, or why it demands the deployment of tens of thousands of U.S. troops to police it are questions rarely asked let alone addressed.

The New York Times has a story on some of the more controversial ways in which state and local government are using so-called federal “stimulus” dollars. If anything, it provides some interesting background on the history of the word boondoggle (not surprisingly, it entered the American lexicon during the New Deal). The gist of the piece is that one person’s boondoggle is another person’s…turtle crossing…skateboard park…or airport for an island in Alaska with 170 people on it. One New Dealer found this out decades ago:

Robert D. Leighninger Jr., a sociologist who wrote “Long-Range Public Investment: The Forgotten Legacy of the New Deal” (South Carolina University Press, 2007), recounted the story of a Works Progress Administration official in Arizona who went off in search of boondoggles, and discovered that the towns he visited seemed to like their own projects but questioned those of their neighbors. “I’ve been hunting all over the state for one, but everywhere I go I’m told it’s in the next county,” the official was quoted as saying in a 1936 newspaper article. “So far I haven’t been able to catch up with a real, live one.”

Naturally, that attitude is alive and well today. I know more than a few folks in central Pennsylvania who thought Alaska’s “Bridge to Nowhere” was a waste of their federal taxpayer dollars but the “Road to Nowhere” in their own backyard was other people’s money well spent. Of course the folks in central Pennsylvania don’t like being taxed by the federal government to pay for a bridge in Alaska — they don’t benefit, but bear a portion of the cost. And that’s a fundamental problem with federal subsidization of activities that are — at most — the proper domain of state and local government.

Set aside the fact that the Constitution never intended for the federal government to make such expenditures. While any of these controversial parochial projects will technically have benefits, sound economic decision-making would seek to optimize those benefits versus the costs. In the politicized world of the congressional sausage factory, costs scarcely factor into the equation given that the burden is borne by million of taxpayers spread out across the country. Therefore, I think the few in Congress who crusade against these perceived boondoggles should spend more time trying to educate their colleagues (don’t laugh) and the public on the need to limit the federal government’s ability to spend the money in the first place.

For more on the problems with the federal subsidization of state and local government, please see this Cato Policy Analysis from my colleague Chris Edwards.

… is not in doubt. But as technology advances, it will not be as strong an identifier as it has been up to now. Scientists have demonstrated that they can fabricate it.

I wrote about the qualities of identifiers — fixity, distinctiveness, and permanence — in my book Identity Crisis. The ability to fabricate DNA renders it slightly less distinctive.