It’s a testament to the general belief in the corporatization of government that we need constant reassurance about any story that reduces corporate power. Such it was that Elizabeth Warren went on CBS’ The Early Show this morning and was asked, “No, seriously, we really are cutting salaries at the bailed-out firms?” And she replied:

The chairman of the panel that oversees the $700 billion federal bailout fund said Thursday the Obama administration is insisting on slashing the salaries of executives of companies that took money from the government.

Appearing on a nationally broadcast interview, Elizabeth Warren said reports of pending slashes in executive salaries are “real.”

Asked on CBS’s “The Early Show” whether reports of the rollback amounted to a relations stunt, Warren, who heads the Targeted Asset Relief Program’s oversight committee, replied, “It’s real in the sense that it says, ‘Guys, you have to understand that you can’t party on like it’s 2007. If you’re going to take taxpayer dollars, then the game has to change. In that sense it’s real.’ “

The default position is to expect anything that punishes executives to be a stunt. But if it’s a stunt, then the New York Times and the Wall Street Journal got punk’d, too.

To be clear, we’re talking about 175 executives, the top 25 moneymakers at the 7 companies receiving the most federal aid: Bank of America, AIG, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial. But those executives really will see their base pay slashed by an average of 90% (if you include total compensation it’s more like 50%), with total salaries coming in under $500,000 a year (at AIG that goes down to around $200,000 a year). Special perks over $25,000 a year – country club memberships, company cars and limos, etc. – will have to be approved by the government as well. Basically, Kenneth Feinberg, the special master for compensation for these firms, is giving the taxpayers a shareholder voice here commensurate with their investment. It’s the type of cost-cutting measure you never see at corporations like these. It’s going to be so popular that even Mitch McConnell couldn’t find a way to criticize it:

The government “ought to have some say” in matters involving executive compensation at firms that received federal rescue dollars, Senate Republican Leader Mitch McConnell (Ky.) said on Wednesday.

However, McConnell would not specify whether he supports the new limits on bonuses that Treasury Department officials intend to issue perhaps as soon as this week.

“I think if the federal government is a partner, in effect, in these companies, then it ought to have some say in the compensation,” he told CNBC, adding that he was not familiar with the White House’s plan.

He went on to come up with some hypothetical maximum wage scheme and criticize that straw man, but that’s not at issue here.

It does seem foreign, to see a populist measure coming out of government. But it really appears to be happening, a pleasant surprise given past events. The White House using the remaining TARP money to focus on small business lending is a positive action as well, increasing stimulus while moving the money away from Wall Street and toward job creators.

Now, if we can get a decent regulatory reform, we’ll be getting somewhere…