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With the newspapers and airwaves thick with eye-glazing stories about Wall Street's financial crisis, a few details have resonated with the American public. One of them is just how much corporate CEOs are paid these days.

Top corporate salaries are no longer merely seven figures. The average pay package for the chief executives of the 500 biggest companies was $12.8 million last year, and Wall Street firms were among the leaders.

Even more to the point, the credit crisis has put the spotlight on the fact these gargantuan salaries are 275 times the salary of the average worker. That's up from 35 times the average worker's pay in the late 1970s. In other words, while the pay of workers has improved modestly the pay of CEOs has gone into orbit.

How did this happen?

Well, the common explanation is that the CEOs were greedy. That may be true, but greed after all is not a new thing. Something else was at work. Though the Wall Street crisis has brought the issue of an ever-widening pay gap to the forefront, many inside government and out have been concerned about this for years. Efforts to rein in executive compensation have been ongoing. Unfortunately, not only have these efforts been unsuccessful, they've sometimes made things worse.

One of those efforts dates to 1993 when securities regulators required companies to make public the salaries of top executives.

Author Dan Ariely, a behavioral economics professor at Duke University and a visiting professor at MIT's Media Lab, explained the unintended effect of this move in his new book "Predictably Irrational: The Hidden Forces That Shape Our Decisions" (Harper Collins, 2008).

"The idea was that once pay was in the open, boards would be reluctant to give executives outrageous salaries and benefits," he wrote. "But guess what happened? Once salaries became public information, the media regularly ran special stories ranking CEOs by pay. Rather than suppressing the executive perks, the publicity had CEOs in America comparing their pay with that of everyone else. In response, executives' salaries skyrocketed."

The regulators who came up with this brainstorm had a basic misunderstanding of human nature. They thought companies' boards of directors would be embarrassed by the high pay packages. In fact, they were embarrassed if their CEO wasn't overpaid, at least in comparison with his or her peers. If their CEO made less than average, how good could he or she be? So up, up, up went the salaries.

If stockholders tried to get companies to hold the line on executive salaries, the boards of directors and CEOs themselves would call on executive compensation firms such as Equilar to justify the pay increases. This company offers, among other things, "top-five compensation benchmarking, providing clients with instant access to presentation-ready data drawn from SEC filings."Yes, says the CEO, queuing his Power Point slide, you better put me in the top five or we won't be respected in the industry.

Executives had all the tools they needed to command ever-higher pay packages.

This leaves the government in a bind today. In its effort to both deal with the Wall Street-caused credit crisis and mollify constituents outraged over stratospheric CEO salaries, Congress has to come up with ways to limit the compensation packages. In some minds this is a side issue, and it's probably impossible to control executive salaries in the long run, but it's an issue that has to be faced before the real problems can be addressed.

Congress could, perhaps, do away with the salary disclosure regulations, but politically that's unlikely. It would look like papering over of the problem. No, that genie is out of the bottle and it's not going back in.

NED BRISTOL is the former editor of The Sun Chronicle.