Opinion in the United States has turned so fiercely against financial firms that the administration’s new recovery plan is in jeopardy. The country is in a severe and still-worsening recession brought on by financial incompetence and outright malfeasance; the public cost of relieving failed banks runs into hundreds of billions of dollars. Yet banks pay tens of billions in bonuses, buy new corporate jets, and lavishly furnish their executives’ offices – or so the public perceives. Rage is not too strong a word for the public response.

Curbs on executive pay for firms seeking taxpayer assistance, such as those the Obama administration has announced, were therefore a political necessity. The administration proposes a $500,000 ceiling on pay at firms receiving further government support. Extra pay in the form of restricted stock or linked in other ways to long-term performance will apparently be allowed.