Obama new cause for poverty in America?

[KrazyHorse]

If they can be replaced at lower pay then they are charity cases, and if you believe that competition works AT ALL you have to explain to me why, exactly, no other firm ever thought of cutting pay for its top employees before.

[DaShi]

You do realize that I'm a socialist.

[KrazyHorse]

"Whatever"?

In other words, you just like the idea of some fat cat getting his pay cut, and you don't really care about the consequences. Your posts are therefore nothing more than crude justifications for your prejudices.

[KrazyHorse]

a) No, I didn't
b) If you are, then please stop trying to engage on a level where it appears as though you accept the basic premises of economics.

[DaShi]

Ok, then please explain to me how someone pushing money around earns a million dollar salary in such a way that is good for the economy.

[DanS]

This is about punishment, but some punishment needs to be meted out anyway for running the country off the rails. Sort of seems like a tremendously blunt instrument for punishment, but, well...

Also, I don't think it's a positive trend that so many of our best and brightest are going into finance. Our incentive system for industries other than finance are probably out of whack.

[KrazyHorse]

Ok, then please explain to me how someone pushing money around earns a million dollar salary in such a way that is good for the economy.

"Pushing money around" = allocating capital

I find it hard to believe that you don't see the benefits in allocating capital most efficiently.

[KrazyHorse]

This is about punishment, but some punishment needs to be meted out anyway for running the country off the rails.

Errr....what? You're now of the opinion that the government should be in the habit of punishing people because, ex-post, you believe that they made mistakes (and broke no laws)?

[DanS]

As far as making a habit of it, no. However, a good chunk of the banking industry was negligent in its fiduciary duties and got a bailout from Uncle Sam when they should have been kicked in the balls meanwhile.

[KrazyHorse]

Also, I don't think it's a positive trend that so many of our best and brightest are going into finance. Our incentive system for industries other than finance are probably out of whack.

Well, tell that to the people who have decided that fresh PhDs in serious subjects should toil away for between 40-50k for 6 years in order to get a low-probability shot at securing a faculty job paying 90k

Or if they go into tech industries, that these fresh PhDs should only get paid 70 or 80k, going up to 120k or so with 20 years experience.

**** that noise. I'm going where the money is.

[DanS]

I don't blame you, but (a) we're talking about only a very small subset of the best and brightest (i.e., mainly those with mathematics/physics PhDs); and (b) we're talking about the inadequacy of the incentives in industries other than finance. The high compensation in finance is merely a marker of these inadequacies.

[KrazyHorse]

However, a good chunk of the banking industry was negligent in its fiduciary duties

Really? How do you know that?

Also, there's a good parallel here with bank runs and the FDIC. Are banks which are victims of a bank run negligent? Should all banks be in the habit of carrying 100% reserves? Shouldn't we encourage a level of risk taking that DOES lead to a collapse every once in a while, because the upside outweighs the down?

I'm just not sure that it's obvious anything in general is wrong. Again, ex-post it's obvious that certain specific assumptions were wrong. But this is the normal trend. Somebody comes up with new ideas that add value, more people start getting into it, the market is overpriced, the market crashes, and a more reasonable balance is struck. Is there anything more to this than animal spirits?

[Saras]

KH (b)

[KrazyHorse]

You're going to have to be less succinct.

[Kuciwalker]

I thought a company is like a team. It profits or fails as a unit.

The American people will not sit still while its tax money is syphoned off by the privileged rich. It is not a "penalty" if the American people (via their goverment) decides to loan its money only to company's which have reasonable compensation levels for its executives. And once again, if the company doesn't want to accept the loan on the conditions, no one is making them.

Oh? The companies were informed of all these conditions when they accepted these loans last year? These conditions are just on new loans being offered?