So over in New York, Goldman Sachs just had a record breaking year in terms of profits and will be granting huge bonuses to its CEOs. That's just friggin' great. So the US treasury has to sell bonds to make ends meet, and Goldman can make huge money from these sales and then grant huge bonuses. Goldman is making a point in doing this. They want to show Obama that they are not concerned about his attempts to regulate the financial sector... because we need them. See?
I know that in any crisis, some will profit, especially as the failure of Bear Stearns and Lehman Bros. has concentrated the market. But it is still disgusting to me when everyone else is losing jobs, homes, and standard of living and they are bragging about record bonuses, especially after the fervor that hit following AIG's awarding of bonuses. If no one can pay huge sums, then no one will lose talent. That argument that they need huge sums to keep "good" people is bogus. No one is worth that much money.
I was also irritated by NPR this morning. They are running a series on how the economic crisis is stirring a Free-Market Debate Now I appreciate how NPR wants to educate the general public, but it struck me that this shouldn't really be such a big debate. We talk as if there is only free-market capitalism (no government) and government controlled economies, commonly called communism. But we all know that between these two extremes is really a spectrum. There is always some modicum of government intervention. Hello! We need someone to print money and charter banks!
There is no absolutely correct mix and the mix must change and adjust over time. All we have to do is compare European countries to the UK and the US to see the differences. There are varying degrees of government involvement in the economies of Europe, and the people are free, happy, and productive. Like democracy, each country chooses the mix that works for itself. Why talk in absolutes? Maybe NPR will get to this thinking going forward.
[Posted on behalf of USWest]
Wednesday, June 24, 2009
Big Bonuses at Goldman
Posted by Dr. Strangelove at 10:33 AM
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2 comments:
I heard that Citi-Bank is giving all their employees a 50% pay raise in lieu of bonuses.
US West: you're around the bend. "If no one can pay huge sums, then no one will lose talent." Ya... and once we have world government, then no one can pay huge bonuses. Stop deluding yourself--"money finds its own level." The amount of control necessary to keep everyone from paying "huge bonuses" (or some equivalent form of compensation) is not possible. Like it or not, the people at Goldman on average are smarter than the people in government, and if you try and change that by limiting pay in one sector of the economy, or one country in the world, you're just squeezing the toothepaste from one side of the tube to the other.
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