Re: Bonuses and Bailouts

basicmath — Sun, 16 Nov 2008 13:57:42 -0000

I am baffled. Let the government "arbitrarily" decide? Let's see: Mr. Banker lost enough money to necessitate borrowing from my grandkids fronted by a bridge loan from the Chinese and the effective reduced purchasing power of the dollar--in order to keep the business afloat. Use that money for your beach house?

Who exactly are "those likely to create value?" Do you mean the geniuses who have driven the value of bank stocks to decade lows, or the ones who drove them to zero? Perhaps you refer to the brilliant minds who ignited a financial and economic firestorm that has removed about 20 trillion dollars (and counting) of wealth from the world economy. Or do we put our hopes in the next generation of whiz kids who pretend that studying accounting and marketing are substitutes for real learning; who have read little history, literature or philosophy and therefore have scant knowledge of events, feelings, or ideas; and whose notion of creating value is to combine the writing of fake IOUs with a backyard pyramid scheme (the CDS market)?

My favorite argument for the payment of bonuses, and one I've heard before, (miraculously, as I would think this would have been laughed out of existence after the first airing), is that bankers ought to be paid bonuses because they "expect" them. After all, the argument goes, they all get them; it's part of their regular compensation. No one but an idiot (and bankers are not idiots!) would sign on to eat steak and wear fine clothes all year while slaving over a computer screen 60 hours a week for a mere 150 or 200 thousand dollar base! What kind of self-respecting Ivy grad would submit to such backbreaking, soul-sucking work if there were not another 400-600 thousand coming in December? The admittedly flimsy counter-argument of course is that bonus means bonus and is not part of regular comp because it is performance based and will be paid only if the money is generated and earned. I say flimsy because this naive belief in free-market ideology as anything other than a marketing ruse ignores the inevitability of begging the loathsome government to steal from the taxpayers in order to ensure the pyramid is extended to future generations.
I have expectations too--like people who are allowed to roam the streets freely ought to have a conscience--but if I can live with the disappointment of failed expectations so can you.

Shame. Then pox. Then prison.

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Re: Bonuses and Bailouts