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October 19th, 2009 3:20 pm
Two Policies, One Principle?

Talk about mixed messages. Yesterday, top White House advisor David Axelrod warned Goldman Sachs for having the audacity to link pay for performance during a recession. The end-of-year compensation is apparently “offensive” in a time of recession. Moreover, Wall Street needs to “stand down” its opposition to further regulation of the financial industry because the government needs to “move forward” on “reforms.”

Today, President Barack Obama announces a “shift” in policy towards the government of Sudan. In the past, the President described Omar al-Bashir’s administration as genocidal. Now, in an effort to ransom better treatment for the millions terrorized by al-Bashir’s partisans, Obama offers “incentives” (i.e. money) hoping it will spur a change of behavior.

How curious. On the one hand, the Obama foreign policy team thinks money is a better motivator than economic coercion or military force. On the other hand, the Obama domestic policy team thinks coercive regulatory policies and voluntary denial of bonuses are better ways to incentivize performance than offering big pay-days to top flight financial talent. Hmmm…

One searches for the critical distinction to make sense of these seemingly contradictory approaches. Could the best explanation be that with Sudan the White House determines the who, what, when, where, and why of using money as an incentive, while in the case of Goldman Sachs someone other than the government is making the decisions?  If you could pick only one instance to use money as an enticement, should it be for the people that systematically rape, maim, and murder their neighbors?

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