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Bonuses Fueled Meltdown
Bonuses will be paltry on Wall Street this year, at least relative to the excesses of past years, but this may be for the best, according to The New York Times. "Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street's pay structure, in which bonuses are based on short term profits, encouraged employees to act like gamblers at a casino — and let them collect their winnings while the roulette wheel was still spinning." In 2006, Merrill Lynch's head mortgage honcho made a $35 million bonus. That same year, Goldman Sachs paid more than 50 people $20 million each. "Compensation was flawed top to bottom," said Lucian A. Bebchuk, an expert on compensation from Harvard Law School. "The whole organization was responding to distorted incentives."
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Human nature combined with unregulated capitalism promotes the culture of greed which is the main culprit of the financial fiasco of 2008. No one is going to turn away a huge bonus, but one has to ask what the boards of the offending companies were thinking. Big money leads to big egos, selfishness, and a warped value system. Our society needs to re-focus its priorities, and government needs to implement the double audit on the big money companies.
Republican's values in support of no regulation are promoting white collar crime (while democrats have their own ethical challenges). Regardless of the party, greed is causing our current financial trouble. Until we stop worshipping the dollar and get back to the true values our country was founded on, we're going to continue on the path towards our own demise.
That managers and employees would risk company money to enhance bonuses came as a complete surprise to Alan Greenspan leading him to question his Free Market, Deregulation philosophy before a congressional committee.
A supreme disconnect between theory and practice.
There's little wrong with greed if it is tempered by fear. But these guys played with other people's money as though they were in a video game. They lost very little for themselves. They just broke down a lot of little guys, and some big investors who made the serious mistake of trusting them.
They've lost the key ingredient in any market: trust. They deserve no bonuses. And you are exactly right about the short-term thinking. It's absurd, but it's real.
Go to Youtube.com
Search:
"Zeitgeist II addendum", Full Movie
and enjoy the truth
He should go to jail for a long time but first he should be made to face all the innocent people and charities he duped - or should I say shtupt.
Thank you.
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