This is the Cato Daily Podcast for Wednesday, June 10th, 2009. I'm Caleb Brown.

The formal title is Special Master for Compensation. He will be known simply as the pay czar, a federal appointee with the

authority to judge the value of executives at bailed out institutions. Mark Calabria,

director of financial regulation studies at the Cato Institute,

comments.

Congress has directed the administration to set up compensation guides for banks or any institutions receiving TARP money.

So that would not simply be banks, but it would be other financial issues like AIG.

It would also cover the auto companies.

And what Congress has been very vague in this, and they've just basically said,

you know, we're concerned about that the compensation practices that these industries

sort of contributed to their problems.

And that as long as they're getting taxpayer funds via the TARP money that people should

be compensated in a reasonable manner.

So there's a lot of vagueness to what Congress has delegated to the administration.

The administration has chosen to decide to, we're going to get a czar in place and we're going to have this czar go out

there and outline the practices that are acceptable for TARP receiving institutions.

Of this position is Special Master for Compensation.

It goes to Kenneth Feinberg.

He oversaw the Federal Government's Compensation Fund

for Victims of September 11 11th terrorist attacks.

What evidence is there that pay practices

for these executives contributed to their problems?

...