Government Controlling the Economy

So what does everyone think about the Congress passing a bill to allow the government to step in and arbitrate disputes over wages. Thus, the government is setting a wage above what the firm is willing to pay. This is tantamount to the government setting a wage floor, which we know from economics which will lower corporate profits and increase unemployment.  We know that if corporate profits are decreasing in the future, the equity markets, which represent the total expected future corporate profits discounted back to the present, will decrease in expectation. The stock market is a leading indicator. Thus, if Congress passes the union bill, equities will fall (holding everything else constant).  Since when does the government have the power to control the economy? Recent Barack Obama has denied any willingness to accept TARP money from Investment Banks such as Goldman Sachs. Hence these companies are now unable to hand out those ridiculous corporate salaries and move on with day-to-day operations. My theory was we would fix the banking Industry not control it. Look at our economy, the two main industries, Auto and Financials are governmentally controlled. We are slowly shifting over to european socialism and are becoming what we would call a controlled economy.

Tax Cut Parable

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