I always thought pay cap rules coming from Washington were more show than real. Earlier this year, I pointed out the weaknesses in the initial CEO pay cap rules. And, in fact, the new twist on this will cover a relatively few in the high-flying world of obscene CEO pay:

The Obama administration’s sweeping new proposal to restrict executive pay is likely to be a humbling exercise for seven of the nation’s largest companies, which have received billions of dollars in federal assistance to survive the economic crisis.

But for most other companies, the plan is expected to have only a marginal effect on pay practices for now.

The Treasury Department on Wednesday appointed a well-known Washington lawyer, Kenneth R. Feinberg, to oversee the compensation of employees at the seven companies — the American International Group, Citigroup, Bank of America, General Motors, Chrysler and the financing arms of the two automakers.

He will have broad discretion to set the salaries and bonuses for their five most senior executives and their 20 most highly paid employees.

   Truth is, that if you want changes in corporate behavior, you can only get that by (a) changing the entire culture we live in that extols the so-called "free market" and the role of CEOs (who somehow are held in high esteem when, based on the facts of their performance, many of those high-paid folks have failed or, at best, are average performers) and/or (b) increasing union power to have some day-to-day check on corporate behavior (of course, labor leaders would have to want to exercise such control–but that’s another story).

   But, the cultural problem is deeper–reflected in a column today in The Financial Times by the paper’s U.S. editor, Chrystia Freeland:

More importantly, the driving principle of capitalism isn’t shared "sacrifice", it is financial gain. It is one thing for the White House to impose political restrictions on companies in which it has made a big investment, such as the Tarp recipients. It is quite different for the state to require private investors, such as the Chrysler creditors, to be guided by any compass other than seeking a maximum financial return.[emphasis added]

   And…

Justice Ginsburg’s order will not alter Chrysler’s fate or improve returns for its creditors. But by briefly poking one last spoke into the White House juggernaut, she has provided a chance to remember that the code of US commerce isn’t to be a good Samaritan; it is to make as much money as you can – so long as you are playing by the rules and haven’t relied on Uncle Sam to bail you out. [emphasis added]

   I certainly agree with Freeland that the idea of making as much money regardless of the consequences to people is, in fact, the code of U.S. commerce. But, the obvious next question: how has that turned out for the people? We have the largest divide between rich and poor in a century, we have a three-decade stretch where productivity has soared and wages have been flat, we have 48 million Americans without health care because the private insurance industry was bent on making as much money as possible, we have businesses teetering on the brink of failure because of the drive to make as much money as possible without being willing to let go of dumb ideological ideas that we can’t have national health care and we have people maxed out because they had to survive on credit cards and home equity to make ends meet.

   If that was success, I shudder at the idea of what people in that rarified world of the leaders of U.S. commerce will think if failure.