New Majority Project

Senator McCain weighed in on CEO pay today. I'll take a backseat to no one in expressing outrage about ill-deserved pay, benefits, and severance; however, is this a job for politicians or corporate boards?

"Americans are right to be offended when the extravagant salaries and severance deals of CEOs ... bear no relation to the success of the company or the wishes of shareholders," he will say, adding that some of those chief executives helped bring on the country's housing crisis and market troubles.

"If I am elected president, I intend to see that wrongdoing of this kind is called to account by federal prosecutors. And under my reforms, all aspects of a CEO's pay, including any severance arrangements, must be approved by shareholders."

As the Sarbanes-Oxley overreaction demonstrated, politicians can turn any short-term problem into a much worse long-term one. Deploying government power to further micro-manage corporate governance strikes me as another dead weight around American competitiveness and job creation.

Do we need better corporate governance? Always. But count me unconvinced that Washington is going to provide it.