Socialist creep. And I mean that in both senses of the term.

Congress will consider legislation to extend some of the curbs on executive pay that now apply only to those banks receiving federal assistance, House Financial Services Committee Chairman Barney Frank said.

“There’s deeply rooted anger on the part of the average American,” the Massachusetts Democrat said at a Washington news conference today.

He said the compensation restrictions would apply to all financial institutions and might be extended to include all U.S. companies.

The provision will be part of a broader package that would likely give the Federal Reserve the authority to monitor systemic risk in the economy and to shut down financial institutions that face too much exposure, Mr. Frank said…

Mr. Geithner said he would consider “extending at least some of the TARP provisions and features of the $500,000 cap to U.S. companies generally.”

It’ll never pass — I think. Granted, we shouldn’t underestimate the appeal of a populist gesture to offset the anger that TARP II’s going to cause, but McCaskill and then Obama and Geithner all paid lip service in their public statements on this subject to the idea that private entities can pay their employees whatever they like. Only when they need rescuing from the feds should the government be entitled to a say, or so the theory goes. If Democrats are planning to expand the concept, they’d better have a handy explanation for why their current position is wrong. Just like they’d better be prepared to see donations from Wall Street tilt sharply to the GOP. (Or had they?) Exit question: Tough talk from Frank or does he really mean it?