Friday Rant: Incentive vs. Disincentive Compensation for Government Execs

That we all pay the salaries of our elected and appointed representatives in these days of dysfunctional economy and legislatures, is beyond galling. Mention firing legislators for failure to reach compromises and pass legislation, or tying Federal Reserve board member's salaries to economic performance at your next barbeque, and you will surely liven up the party.

We absolutely want parity in the work place when it comes to performance and consequences -- fair and equal treatment across the board. Ahh, if it were only that simple?

The attraction of rewarding public officials for a job well done beyond re-election doesn't set well. After all, they're not commissioned sales reps. Yet the idea of penalizing that which can be construed as poor performance is overwhelmingly attractive -- and of course varies among cultures. Today's WSJ reports that "The Bank of Japan said this week that for the next two fiscal years it will slash the annual salary of Gov. Masaaki Shirakawa--whose job it is to try to end the country's persistent deflation--by nearly a third. His pay will drop to ¥23.96 million from this fiscal year's ¥34.22 million (about $286,000 from $409,000)."

This would never work in the U.S. -- and would we want it to? Probably not. An unfortunate aspect of human nature is that we somehow feel better when we can blame or punish an individual or group for a problem. When in fact -- while the circumstances are nearly always far more complex and systemic -- we're surprised when these punitive responses fail to improve the situation.

I have a radical idea: Hire, elect and pay outstanding candidates -- based upon proven performance in relevant arenas -- to accomplish that which we need accomplished with well studied bench marks and terms. Now of course there's far more to resolving our public governance debacle than this, but it's certainly a start.

So in this major election year -- regardless of your political leanings -- narrow your list of priorities that need to be accomplished and support the candidates who have the knowledge, negotiation skills and most proven track record to accomplish them. And if you're concerned about how much we pay U.S. Federal Reserve Chairman Ben Bernanke, "his salary has been frozen at $199,700 for several years."

Blame and shame simply doesn't work. We almost always get what we pay for.

- William Busch

Voices (3)

  1. bitter and twisted:

    Its astonishingly naive to think that rich candidates wont be corrupt because theyre already rich.

    Penalities for failiure are the flip side of rewards for success

  2. phil fersht:


    While I agree with you in principal, I cannot tell you how many brainless idiots in the corporate world earn obscene salaries for contributing very little. Unfortunately, you do not always get what you pay for when it comes to people. If someone is greedy and skilled at negotiating themselves a large salary, it probably means they are more adept at looking out for their own needs than those of their constituents.

    I’d rather see people in government who’ve already made their "xxxx you" money and are entering civic duty out of a sense of pride and duty,


  3. Jason Busch:

    In the history of this country, the greatest men (and they were almost all men until recently, unfortunately) gave service because of what they perceived to be a civic and/or philosophical obligation — George Washington, Thomas Jefferson, Benjamin Franklin, Abraham Lincoln, Teddy Roosevelt, etc. Compensation — incentive or otherwise — had nothing to do with their choosing to serve the nation. Rather, after establishing themselves in other professional areas — perhaps with the exception of Lincoln, because he was already a lawyer — they opted to serve their country.

    So in the spirit of what has worked in the past and so failed us recently, I would propose a radical counter in the spirit of outlandish ideas to cutting, raising or creating incentives for salaries on the Federal level. To wit, above the managerial/director equivalent level, eliminate them entirely, aside from reimbursed expenses and a small stipend. And make elected service in particular volunteer or "by the hour" as it is in New Hampshire.

    We need renaissance men (and women) serving us in government. The critical skills to lead and shape what is right for a country that grew up in the spirit of individualism and private sector thrift and growth until the 20th century FDR-style socialism so bastardized such principles — which is not so ironically when Federal salaries took off — are developed elsewhere, not pushing paper in Washington.

    To govern is an honor. To manage in the capacity of a senior civil servant is a service to one’s country. When we confuse this with politicians and senior Federal executives needing to enrich themselves through one means or another (because they have not already), then we’ll get exactly what we deserve. And have gotten for the past 75 yeas, mind you.

    BTW … the reason the Busch/Reisman clan strongly supported Rahm for mayor in Chicago had little to do with his politics, aside from wanting to improve education for the city’s worst off kids. The fact he made his money already told us that he would govern for civic, not personal, gain. Unlike the other mayors of Chicago and our parade of governors that have ended up in the slammer.

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