I blogged earlier today about the $500K salary cap. It turns out that this cap is only really applicable to firms that take future TARP funds, not those who already have. Does this make the cap more palatable? After all, the only firms that are likely to request future funding are those who are already in dire straits. I think this is the wrong way to look at the cap. The form of the cap seems to me to be hugely anticompetetive--early TARP recipients got no-strings-attached loans, whereas future TARP recipients will have huge strings attached to any funding they receive. The federal government appears to have engaged in an attempt to not only pick winners (which they are notoriously bad at), but to help out their "chosen ones" by forcing their competitors enter into a Faustian bargain should they want access to the same same government funds.