This is the Cato Daily Podcast for Thursday, August 19th, 2010.

I'm Caleb Brown.

If banker and other executive pay is such a problem, why haven't shareholders done something

about it?

Why turn to the federal government to regulate?

Turns out shareholders have taken action, but it's not action you might have expected.

Those actions have been driven as much by federal

rules as competition for executives. Mark Calabria, director of financial

regulation studies at the Cato Institute, offers his thoughts.

Let's first take a step back. at the Kato Institute offers his thoughts.

Let's first take a step back and talk about sort of a broader trend, which is every time you end up in a recession,

the question's really more become about, you know, sort of growing the pie,

how do we divide the pie?

You know, and so the last time around when we were in the early 90s in a recession and

certainly you go back and look at statements that were made during the 30s.

Every time the economy turns out, there's always a sort of, these guys are getting paid too

much, it ain't fair, you know.

And so some of this, think would have happened regardless of whether we'd

had the bailouts simply because in recessions people start to worry about income distributions

more.

When everybody's making money and your stock returns are doing quite well, you don't really

care as much about what the CEOs getting paid.

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