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End Bonuses For Bankers
theodp writes "NYU risk engineering prof Nassim Nicholas Taleb has a suggestion that won't sit too well with the banksters. In his NY Times op-ed, Taleb writes: 'I have a solution for the problem of bankers who take risks that threaten the general public: Eliminate bonuses.' The problem with the bonus system, Taleb explains, is that it provides an incentive to take risks: 'The asymmetric nature of the bonus (an incentive for success without a corresponding disincentive for failure) causes hidden risks to accumulate in the financial system and become a catalyst for disaster. This violates the fundamental rules of capitalism; Adam Smith himself was wary of the effect of limiting liability, a bedrock principle of the modern corporation.'"
My wife worked for an attorney whose check would bounce. Every payday there was a dash to the issuing bank. They never paid Medicare or SS taxes to the fed
Your wife was complicit in her acquiescence to such conditions. Congratulations.
By asserting what is obvious is not true, you claim "reasonable" discussion?
This is why people are marching on the banks. Because fucksticks like YOU work so hard to keep the issues muddy when they are really quite clear.
Quite clear. You had a long standing regulation that prevented financial institutions from holding savings deposits while also investing the stock market revoked by both parties during the Clinton years. You also had a law passed in the Carter years to make it easier for people who couldn't (and as we can now see, shouldn't) have been granted a mortgage provided one. This law got itself teeth during the Clinton years to aggressively push these high risk mortgages out there, or the banks would suffer fines. All of this backed up by federally created Fannie Mae and Freddie Mac, who then started bundling these high risk loans with AAA credit loans. All the while, anything that had once been considered wise lending practices were thrown out the window.
Bankers are the main cause of our destroyed economy. They have so far failed to hold themselves accountable for that (big laugh), and our system is so rigged that it won't hold them accountable either.
You're half right. It is the system, as in our government, that is ultimately responsible to hold the banks accountable. Not only did it fail in this duty, it actively pushed policies that created an artificial bubble that had no choice but to collapse.
So the people are going to the streets to hold them accountable.
Okay, so here's the part I really don't understand. Why are people complaining about the banks, when at every bad turn that led us to where we are was put in place by the government? Why aren't these folks called "Occupy Congress", or how about "Occupy Fannie Mae"?
And before you start spewing anymore defensive horseshit, just keep in mind that the reason people are in the streets now is that we've fucking got nothing left to lose, 'cause you and your useless, greedy, lazy banker buddies have taken everything we have.
The "bankers" have zero authority to "take" anything from you. Your government is the only entity that has that power, and it used it to re-supply those institutions that it had otherwise bankrupted with a set of really bad policies.
I get why folks are angry... just not why they're angry at what amounts to middle men in this mess.
The line must be drawn here. This far. No further.
As a general rule, businesses grow and keep a dominant position by providing value. Governments provide a mix of protection and destruction, and the government leaders gain power by appealing to the worst desires of the gullible.
It's much harder to stop a rogue government than a rogue business. And before you say "they can be stopped by voting them out of office", consider that it's only been a month since Nancy Pelosi proposed cancelling the next election.
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