Democrats vs. incentives

One of the interesting themes running through the Democratic policies now being passed into law is a hostility to incentives. Above, Congressman Barney Frank asks why investment bankers need bonuses to do a good job. But NY Gov. Patterson apparently thinks they work, at least for public-sector employees:

ALBANY - Gov. Paterson has secretly granted raises of as much as 46 percent to more than a dozen staffers at a time when he has asked 130,000 state workers to give up 3 percent pay hikes because of the state's fiscal crisis...

Here is my own take on how to motivate government employees.