In case you think my headline is too harsh, consider the one at Bloomberg: “Obama to Work on Executive Pay Limits After Industry Complaints.” So in case you were laboring under the delusion that widespread managerial failure among the nations’ top banks, to the point of being dependent on taxpayer provided drip-feeds among the nation’s top banks, would lead most thinking people to show those officers the door. Remember, these companies have been looted, in a process described by George Akerlof and Paul Romer in a 1993 Brookings paper:
Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society’s expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.
Bankruptcy for profit occurs most commonly when a government guarantees a firm’s debt obligations. The most obvious such guarantee is deposit insurance, but governments also implicitly or explicitly guarantee the policies of insurance companies, the pension obligations of private firms, virtually all the obligations of large or influential firms. These arrangements can create a web of companies that operate under soft budget constraints. To enforce discipline and to limit opportunism by shareholders, governments make continued access to the guarantees contingent on meeting specific targets for an accounting measure of net worth. However, because net worth is typically a small fraction of total assets for the insured institutions (this, after all, is why they demand and receive the government guarantees), bankruptcy for profit can easily become a more attractive strategy for the owners than maximizing true economic values…
Unfortunately, firms covered by government guarantees are not the only ones that face severely distorted incentives. Looting can spread symbiotically to other markets, bringing to life a whole economic underworld with perverse incentives. The looters in the sector covered by the government guarantees will make trades with unaffiliated firms outside this sector, causing them to produce in a way that helps maximize the looters’ current extractions with no regard for future losses….
So let us start with the obvious:
1. People in these firms (the large banks on life support) were overpaid by a considerable degree in the last few years. The earnings were bogus (they were hugely overlevered relative to the risks they were taking; in addition to holding more equity , they should also have made greater loss provisions). So recent pay is no guide for what their services are worth
2. The companies ought to be in turnaround mode. Normally, the board brings in a new CEO. the CEO sets a new direction and replaces people at the top either lacking in the right skills or unwilling to support the new program.
3. The managers and line staff were hired when these companies were drunk on growth and fat fees. They are by temperament and training the wrong type now. Look how badly the once well-regarded John Thain stumbled at Merrill
I see no particularly reason to be anxious to hang on to these individuals. The threat to quit is empty. Hedge funds and PE firms, favored havens for disgruntled “talent” are shedding staff and in some cases closing their doors.
And even if there are some legitimately valuable individuals, there is no excuse for an organization being held hostage to them. As DeGaulle remarked, “The graveyards are full of indispensable men.”
Now readers may think I am harping on a minor issue; indeed, I’ve labeled the pay issue “symbolic” because they usually involve too few people (recall that Merrill last year has over 700 staff members earning more than $1 million). But it serves to illustrate how the industry has completely bamboozled Team Obama. If you put the same argument made by the bankers, that they might lose their precious talent, in the mouths of auto industry executives, they’d be laughed out of the room. Yet the financial industry meltdown has done vastly more damage to the economy than the decline of the Big Three, which suggests their ability of their managers and staff to operate competently and responsibly is even more in doubt.
But Team Obama seems cowed by Wall Street psychopaths, so aptly described by The Epicurean Dealmaker. And if the Obama crowd lacks the nerve to take on the banks on issues that are largely window-dressing, it’s obvious they won’t even attempt to tangle with them on matters of substance.
From the Epicurean Dealmaker:
I will go further and say that I have yet to encounter a senior executive manager at a large investment bank who does not demonstrate a very substantial number of the commonly accepted markers for psychopathy.
From Wikipedia:
Common characteristics of those with psychopathy are:
Grandiose sense of self-worth
Superficial charm
Criminal versatility
Reckless disregard for the safety of self or others
Impulse control problems
Irresponsibility
Inability to tolerate boredom
Pathological narcissism
Pathological lying
Shallow affect
Deceitfulness/manipulativeness
Aggressive or violent tendencies, repeated physical fights or assaults on others
Lack of empathy
Lack of remorse, indifferent to or rationalizes having hurt or mistreated others
A sense of extreme entitlement
Lack of or diminished levels of anxiety/nervousness and other emotions
Promiscuous sexual behavior, sexually deviant lifestyle
Poor judgment, failure to learn from experience
Lack of personal insight
Failure to follow any life plan
Abuse of drugs including alcohol
Inability to distinguish right from wrongLooking back over my career, I can recall encountering individuals who were clearly destined from a very tender age for greatness in investment banking. With the exception of the tendency toward physical aggression and violence—investment bankers, as a rule, are the wimpiest and most cowardly of creatures, when it comes to nonverbal violence—and sexual promiscuity and deviancy—for which one only has the self-reported “evidence” of these supposedly superhuman young Lotharios—I find it hard not to ascribe some measure of all these characteristics to those individuals I know who have risen to high management responsibility within an investment bank.
And lest any of you try to rationalize the value of these attributes in anything other than a sales context. consider the findings of Jim Collins in his classic Good to Great. Collins was looking to see what lead to sustained outperformance, and was not looking for leadership style; in fact, he resisted when his team insisted there was something different about how these companies were run.
Their CEOs were the opposite of the investment banking “type” depicted above. They were self-effacing, took blame for failure but shared credit for success, but were nevertheless tenacious and driven (but we’ve tended to stereotype that as being the province of chest-beating alpha males, and may be predisposed to ignore it in those whose priority is organization-building, not narrow self interest).
With that preamble, here’s the Bloomberg story:
The Obama administration said it would work with Congress on limiting executive pay at banks that get federal bailout money after critics said tough new restrictions in an economic stimulus plan would prompt talented managers to leave..
“The president shares a deep concern about excessive executive compensation” and “he looks forward to working with Congress to responsibly address this issue,” she [spokeswoman Jen Psaki] said.
Administration officials wanted to keep the executive compensation measures as part of the financial sector rescue package, according to a person familiar with the administration’s views. This person said the executive compensation provision in the stimulus bill was a contentious issue. The administration decided not to fight the provision because of the possibility that it would have to go back to Congress for more bailout funds, the person said….
Yves here. Did you catch that? The Admiinistration would have fought were it not for the need to keep Congress appeased. Back to the article:
Some of Congress’s provisions go beyond the $500,000 cap announced by Obama last month, by restricting bonuses for senior executives and the next 20 highest employees at companies that receive more than $500 million from the Treasury Department’s Troubled Asset Relief Program. It limits bonuses and other incentive pay at companies on a sliding scale according to how much federal aid they receive….
Yves here. Note that the 20 are ranked by pay, not managerially, so this does have more teeth than earlier formulas. Back to the story:
Asked about complaints the provisions would spur some talented managers to leave companies subject to the restrictions, [senator Christopher] Dodd said today in a statement: “Some very high earners will have to adjust compensation expectations and maintain a different sense of proportion than in the past. The current job market should deter employees from leaving, and if they do, there are many qualified replacements.”
Readers may recall I did some quick back-of-the-envelope math on how far pay fell for top producers at big firms in the dot-bomb era. There were not doubt a few here and there who managed to do better, but the number I heard back then for MDs who ran significant (as in formerly big earning) departments and were key rainmakers themselves was $300,000-$400,000. Compound that forward by 3% inflation and you get $500,000. The pay caps suggested, in other words, are in line with past bad market reward levels. Despite the howls, the bankers would not be underpaid by historic standards. And the other dirty secret is that without the TARP money, you’d likely see more firings at the mid and senior levels.
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Obama made a terrible, terrible choice for his Treasury Secretary.
What’s the difference between greedy Republican rulers and greedy Democrat rulers?
oligarchy: a government in which a few people such as a dominant clan or clique have power.
Great Teevee: Moyers show Journal on PBS
http://www.pbs.org/moyers/journal/02132009/watch.html
I’m a free-market guy, but there is no way I can understand what is happening other than to conclude that the Wall Street pigmen have captured our government and will loot it into the ground.
Damn. This isn’t going to be pretty at all.
“Now readers may think I am harping on a minor issue; indeed, I’ve labeled the pay issue “symbolic” because they usually involve too few people (recall that Merrill last year has over 700 staff members earning more than $1 million).”
Hello? That’s $700,000,000 right there, at ONE company.
That’s a lot of people.
Anon of 1:05 AM<
To clarify: previous proposals involved only the top 5 to 50 (clearly insufficient by the Merrill standard) AND was only the top from a hierarchical standpoint (ie, you could probably count people like the head of IT, head of HR, head of operations in that group, which would not be client facing types earning the big bucks) AND past proposals covered current year cash comp (so you could give someone $20 million in stock, and he could borrow against it, for instance).
This proposal is better designed, which is why the industry is howling.
Yves, not very long ago you brought up the same issue, [psychopaths]. Again in my view (both military and corporate) herein lies the real over all problem, (historically) in many civilizations and now ours. How do we find a balance or good works for individuals with such a nature. Hell are they created or destined to be so. Yves earlier posts have shown, work is progressing in this area (remote identification).
To the American people, these people hold you deeply repugnant. A lower life form in which only occasional contact is made for elections or public gestures, then retreat back to their enclaves for a detox shower and mental shudder/huzz up the back. If your looking to them for help forget it, your factoring in [their] thought process is only how far [you] can get them, no more no less.
They broke the “deal” set up in the Constitution to enact a balance that we both could live in and with. Till they act in accordance with the ONE CONTRACT that matters over all others, they are in breach of contract. To this breach of contract I would like to see Elizabeth Warren chair the renegotiation, till then get stuffed. The American people over the next year just may wake up and see with clarity, what will they do then. Americans love their country to a fault, and have given you to much power out of blind faith, which you have destroyed out of petty greed. Shame, Shame on those that have wrought such a event for personal gain, I have more respect for petty criminals stealing to keep their head above water in the world you created.
Skippy… carnage enabled….if the gloves come off.
I have a CFA Charter. I have character and integrity. I’m out of work because I wouldn’t lie to clients of a large, private, investment advisory firm. I can use a job. I’d be happy with 100K. Get rid of these people so others like me can pick up the pieces and rebuild.
Anon 1:17. Military people are not psychopaths. In my ACTUAL EXPERIENCE IN THE MILITARY, duty, honor, and integrity ruled the day. If the military was running these firms, you would not have these problems. You would have solid, risk manged firms that could survive anything the economy threw at them.
Yves,
Am I being too obvious in pointing out that many politicians also exhibit most, if not all, of the characteristics on that list?
In particular, the number of politicians (around the world, not just in the US) who have compromised their careers due to undisciplined sexual promiscuity is quite remarkable.
ozajh (who has forgotten his infrequently-used password)
Can we nationalize the banks already? That would make tamping down excessive pay a lot easier. Heck, the culture of entitlement at these companies strikes me as a good reason to take the final step in and of itself. We’ll be doing this again in 15 years if the same bozos stay in charge and the corporate cultures don’t change.
Obama is a cool cat. He’s learning who the Big Dogs are.
Yves,
I would like to second George at 12.16 in highlighting this interview. It has been drawn to our attention by Jesse at Cafe American and others, and I think it is very important to this discussion : indeed, worthy of a full review.
Would Geithner have been chosen irrespective of the outcome of the presidential elections?
Maybe Yves is a Stepford Economist?
That’s my proposition. That a shadow government is in place.
Just as a point of (potential) clarification, that list of diagnostic criteria fits much more accurately for ‘sociopathy’ than ‘psychopathy,’ the latter being a much broader term covering diverse kinds of psychosis. And I agree completely that Wall Street is the ideal enviornment for what is called in the trade “successful sociopaths;” think Angelo Mozillo. The sell side is paradise for these kinds of individuals. There may be some manics (bipolar in the trendy parlance), who do very well in Da Bizness if they don’t crash out on the downs. I don’t see too many schizs cutting it on the Street.
The only executive compensation ‘adjustments’ I want are in the employment-qualified category, as in they are no longer employed so they no longer qualify for compensation. I’ve never seen handwaving on pay cappage by the Demos in general and particularly by Bo Prez in particular as substantive. They are just blowing kisses to the outraged populace, a fake pretense of ‘accountability’ to distract from the prodigious wealth transfer to these sub-geniuses simultaneously underway.
Don’t cap ’em, capitate ’em.
@anon 1:24 said……. Anon 1:17. Military people are not psychopaths. In my ACTUAL EXPERIENCE IN THE MILITARY, duty, honor, and integrity ruled the day.
Pentagon/MIC people, not the rank and file, as far as my experience goes started in RGR 1/75HAAF Base, enough said on that point. Ohh some nights at “O” clubs around the world, remind me of Corporate Caligula party’s. Wonder if IBs have STD fall out at morning formation for STDs, that would be a grand sight!
Skippy
Yves, et al,
Re: " The earnings were bogus (they were hugely overlevered relative to the risks they were taking; in addition to holding more equity , they should also have made greater loss provisions). So recent pay is no guide for what their services are worth"
>>> Can you tell me for the record, why The F, these banks did not have to re-state earnings, I mean, like, this entire episode of retardation and criminal activity, i.e, the financial crime spree and looting of America — did that ever get looked at by anyone, or was there ever anyone that thought that something was wrong with the accounting? I still don't get this at all … maybe it is just me and I'm having what one might refer to as, Alptraum, Кошмар, 悪夢, Nachtmerrie,梦魇;恶梦, Mardrömmar, etc, etc ….
* Also see the correlation of vanishing bank examiners and the possible connection to bees: At Annual Beekeeper Conference, All Talk Turns to Colony Collapse Disorder
New science, new diseases, new parasites…and new signs of disappearing bees.
Also See & Hear: Colony Collapse Disorder
Yves, et al,
Re: " The earnings were bogus (they were hugely overlevered relative to the risks they were taking; in addition to holding more equity , they should also have made greater loss provisions). So recent pay is no guide for what their services are worth"
>>> Can you tell me for the record, why The F, these banks did not have to re-state earnings, I mean, like, this entire episode of retardation and criminal activity, i.e, the financial crime spree and looting of America — did that ever get looked at by anyone, or was there ever anyone that thought that something was wrong with the accounting? I still don't get this at all … maybe it is just me and I'm having what one might refer to as, Alptraum, Кошмар, 悪夢, Nachtmerrie,梦魇;恶梦, Mardrömmar, etc, etc ….
* Also see the correlation of vanishing bank examiners and the possible connection to bees: At Annual Beekeeper Conference, All Talk Turns to Colony Collapse Disorder
New science, new diseases, new parasites…and new signs of disappearing bees.
Also See & Hear: Colony Collapse Disorder
Yah, that is a good link, Yves!
>> SIMON JOHNSON: I don't know. I hope they don't trump it. But the signs that I see this week, the body language, the words, the op-eds, the testimony, the way they're treated by certain Congressional committees, it makes me feel very worried.
I have this feeling in my stomach that I felt in other countries, much poorer countries, countries that were headed into really difficult economic situation. When there's a small group of people who got you into a disaster, and who were still powerful. Disaster even made them more powerful. And you know you need to come in and break that power. And you can't. You're stuck.
BILL MOYERS: Both the "Wall Street Journal" and "The New York Times" reported this week that Obama's top two political aides, Rahm Emanuel and David Axelrod, have pushed for tougher action against the banks. But they didn't prevail. Obama apparently sided with Geithner and the Treasury Department in using a velvet glove.
>> Worth a look by everyone, including The First Family!
Yves,
I was going to chastise you for using such a provacative word as physopath until you recited the DSM3 criteria. This is a bit of a pet issue for me, as I regard personality disorder tendencies to be as important as the myers-briggs personality traits in understanding business behavior.
I will still call a nit, though, as the less provacative variant is sociopath, and better characterizes the behavior as social rather psychological.
Sociopaths make up 4% of the population, 50% of prison population, and a lot of the top talent in business. Other personality disorders also trickle to the top of the food chain – narcisistic, obsessive-compulsive, and paranoid come to mind personally.
The reason these trait works for organizations is because group intellegence becomes dilluted under normal social pressures. To resonate through the organizational mud requires amplification. The nail seeks a hammer.
Of course there are another set of personality types who are not naturally tolerant of the blindness will of organizations. Luckily some of these people become bloggers.
And as I hinted before, we have a large amount of government infrastructure to care for sociopaths. We even have a system (the Jury trial) to help us sort them out.
@Richard said….. We even have a system (the Jury trial) to help us sort them out.
They may object on the grounds of [by peers] need to gear up for that possibility.
skippy…I blame it on the DIA
A bit of personal reflection:
“Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations”
When I was working on unwinding the imploded Swedish shadow banking system in the early 90s, I frequently came across whole businesses that looked real, had business plans that looked real, attracted investors, etc., but nevertheless, it occured to me, essentially were created to profit the insiders and never really intended to become viable enterprises. They did not fulfil the critera of Ponzi-schemes, and could thus not be prosecuted as such. When a bubble is inflating, it can be difficult to separate the real thing from the Potemkin version
Those indivuduals operating the Potemkin businesses showed no remorse and seemed, in fact, often to be in denial about the fictious character of their undertakings…
It was weird, but a good learning process.
Hence why the current bubble began to seem entirely surreal a few years back. If you have seen Dubai, you will understand..
I have recently been re-reading the “autobiography” of Pu-Yi, the last emperor of China. He writes of his re-education process by the communists as “learning to be human”.
Forget the pay cap for bankers, I say re-education through labour
Richard Kline and BG,
You are quite right, in the context of the DSM-IV diagnostic criteria, the right word to use is ‘sociopathy’, and the term identifies a personality disorder.
The word was coined (I think by the American Psychiatric Association) in the 50s in an attempt to ditch various misleading (especially, sensationalist) connotations of the word ‘psychopath’.
The p-word hasn’t quite gone out of professional use though. In some quarters it serves as shorthand roughly for ‘someone who has a big PCL-R score’. In this usage, the term identifies a syndrome, rather than a disorder, and is associated with a Canadian psychologist called Robert Hare, who, for good or ill, doesn’t have to follow the terminological preferences of the APA.
The nice thing about looking for a syndrome rather than a disorder is that it is forward-looking rather than retrospective. By the time your sociopath has enough of a history to pop up on DSM-IV, plenty of damage has already been done done.
What PCL-R tells you is that if you encounter someone who is charming, glib and just a tidge reckless, or alternatively, someone who is just an outright terrifying bully and liar, you should watch out very carefully indeed for a well-defined bunch of other deeply unappealing traits. They are very distinctive, and they cluster.
That little bit of understanding can often steer one out of the way of quite a lot of harm. FWIW this has worked for me at times – particularly one searing incident in the fairly recent past, which I escaped from with my skin intact.
Incidentally I hope bg’s suggestion that applying some such test in corporations would be as useful as Myers-Briggs eventually gets some traction (Hare pushes this idea occasionally). Me, I think it would be a whole lot more useful than Myers-Briggs – and I’d love to know what Fuld or Mozillo would score on PCL-R.
Anonymous at 1:24Am said “Anon 1:17. Military people are not psychopaths. In my ACTUAL EXPERIENCE IN THE MILITARY, duty, honor, and integrity ruled the day. If the military was running these firms, you would not have these problems. You would have solid, risk manged firms that could survive anything the economy threw at them.”
Yeah, right [lol]. Suggest you read this article.
=========================
February 15, 2009
Inquiry on Graft in Iraq Focuses on U.S. Officers
By JAMES GLANZ, C.J. CHIVERS and WILLIAM K. RASHBAUM
Federal authorities examining the early, chaotic days of the $125 billion American-led effort to rebuild Iraq have significantly broadened their inquiry to include senior American military officers who oversaw the program, according to interviews with senior government officials and court documents.
Court records show that last month investigators subpoenaed the personal bank records of Col. Anthony B. Bell, who is now retired from the Army but who was in charge of reconstruction contracting in Iraq in 2003 and 2004 when the small operation grew into a frenzied attempt to remake the country’s broken infrastructure. In addition, investigators are examining the activities of Lt. Col. Ronald W. Hirtle of the Air Force, who was a senior contracting officer in Baghdad in 2004, according to two federal officials involved in the inquiry.
….
Link
=================
Great post. Especially useful to put it in the Akerlof-Romer theoretical framework.
But you may not have got the political dynamics right when you say that Team Obama seems cowed by the financial psychopaths. Suppose that a long range objective of Obama is the politicization or “Chicagoization” of the American economy, where all sections of society from low to high become dependent on the state for their welfare, on “who you know” in government, and where all sections of society in turn are obliged to provide services that consolidate the political power of the faction or clique that controls the state. Maintaining a wealthy upper class of financial criminals and gangsters who, in turn, provide top politicians with all sorts of kickbacks, payoffs and contributions would be quite consistent with this “Chicago Model” political vision.
@jojo,
My point exactly, I’ve been at DDDC events, mostly weapons and money transfers, always orders from above. Officer to lobbyist or politician is just a change of attire, their are good ones although.
Nationalization would put paid to the pay issue. Federal pay scales are what they are and the top pay for Senior Executive Service is around $170,000 with some minor COLAs.
Studies on pay have shown that it is more about relative amount than absolute amount anyway. That is, most people would prefer to make 50% more relative to their peer group than make twice as much absolutely but be paid less than their peers.
Hi Yves – is it possible to use italics for quotes? It would make your blog easier to read.
Wasn’t the character Patrick Bateman of the book/movie “American Psycho” an investment banker?
Ellis should write a sequel about today’s financial mileau and how Bateman is now pissed off at his lower-than-expected bonus.
I hated that book, but reading Yves’s post makes me think that Ellis was onto something about that culture (I remember great scenes about the obsession/competition of stylish business cards).
Traits of either a psychopathic banker or a typical American teenager.
Senator Dodd was responsible for this amendment if I’m not mistaken, and he’s not an historical enemy of the banking system. Some Obama advisers also wanted pay cuts… so something is changing.
Hypothesis: as the banks lose more money, their political influence will wane, we’re just not quite there yet. E.g. huge salaries means less money for lending, antagonizing even more other industries that are having credit lines cut anyway. As a result non-financial industries will eventually reluctantly give political support to stricter regulation of the banks, or even nationalization. Politicians will then change their opinions correspondingly. Support for stricter bank regulation by business leaders should therefore be a leading indicator worth looking for.
It may not just be the executives who are sociopaths, but the corporations (fictional persons) themselves. An interesting book (and movie) made this argument a few years ago:
The Corporation: The Pathological Pursuit of Profit and Power (http://www.amazon.com/Corporation-Pathological-Pursuit-Profit-Power/dp/0743247442 )
Congress did a good thing with these pay cuts. Obama will “work with” them later, who knows what threats that will involve, but for not I have the greatest respect for what Congress has done. They have put a fairly hard cap on the comp. of every single employee in the organization with this cap. All that the banks could do to circumvent it is to give multimillion dollar base salaries. I doubt that will happen, but nothing is impossible!
I suppose Dodd supports it because his hedge funds in Connecticut can hire the sell-side stars that quit because of this.
substitute “now” for “not” in the second line just above.
Yves,
Don’t forget:
Megalomania (from the Greek word μεγαλομανία) is a historical term for behavior characterized by delusional fantasies of wealth, power, genius, or omnipotence — often generally termed as delusions of grandeur or grandiose delusions. It is a Greek word ,”megalo” meaning “very large”, “great”, or “exaggerated” and “mania” meaning obsession thus combining to denote an obsession with, either in the form of irrational perceived need for, or preoccupation with one’s own estimation of having and/or obtaining, grandiosity and extravagance (especially in the form of great fame and popularity, material wealth, social influence or political power, or more than one or even all of the aforesaid) and accompanying complete desirous and bombastic abandon; a common symptom if not the key diagnostic feature of megalomania. It may be a symptom of manic or paranoid disorders.[citation needed] However it is not considered a distinct mental disorder of itself according to the Diagnostic and Statistical Manual of Mental Disorders.
Psychopathy is a psychological construct that describes chronic immoral and antisocial behavior. The term is often used interchangeably with sociopathy.
Lock the bastards in prison!
I’ve heard a lot of people speculate what our banking system will look like… say in 10 years.
The investment banking model is broken. CDS will be regulated as will other drivitives. Securitization will be restarted… but with a much more focus on quality.
In this world, I just don’t see the huge profits that have justified the large salaries. Look at the relative pay packages of say a BAC trader vs a MER trader. Since the MER model is dead. Pay will look more like the BAC model in the future.
The whores in in DC are bought and paid for by these same firms. The US is a banana republic, fleecing the wealth of the lower 90% for the benefit of the upper 10% oligarchy.
That’s an interesting list of diagnostic criteria, but what on earth is this one doing there: “Failure to follow any life plan”?
the dodd amendment was nothing more than political cover. as long as a candidate knows he can raise $750m and from whence it came, this left-handed back scratching will continue ad infinitum.
I have a relative that is the same age as me. I was speaking to him over the summer, he works as a broker. At one point I made a comment that he bit on. I said in relation to buying something that it was my top. That’s the most I was going to pay. He then went on to tell me how sucessful I could be on Wall st.
The fact that these people think they have some sort of talent is just crazy. They don’t do anything that difficult, and most of their time is spent making things more difficult for everyone else.
Not interested. You could not pay me enough to deal with the douchebags that have been produced over the past decade.
Maybe they are on to something with the bonuses. They have to pay them that much to keep them around. “There are a ton of assholes here, I need to get paid a lot to deal with them.”
It’s hard to imagine that the US taxpayer is supposed to subsidize the banks’ HR strategy.
But if the pay provision is what Yves says it is, it will work! Looks like it was designed by a quant, someone who knows math well. Congress is finally growing a pair …
Conservatives have found the soft-spot in Obama’s armor: Tim Geithner, Larry Summers, and their Wall Street buddying of the Dems. If I’m a Republican strategist, I tell them to hammer at this: Americans will quickly shift to Republicans on this issue if they play it right.
Wall Street pigmen qualify as psychopaths? My partner’s dad worked as a consultant to corporate CEOs for decades and confirmed that most aren’t that bright and just got ‘into the club.’ The concept that we have only a limited number of people who can run the banks is bunk. Dump the losers and get new management, then regulate them. Many thanks to Yves for her tireless work – and to all of you who comment, too. Keep going!
All of those bankers voted for Obama anyway, as I suppose they found Sarah Palin unpalatable. Why is it any surprise that Obama and company would shelter them from the storm?
I don’t see why anybody would buy that “retention” BS. Don’t we want these banks to lose all of their so-called “stars” and let in more lower-paid, bureaucratic types to manage the unwinding of these failed behemoths?
I’M SORRY, BUT ENOUGH TIME HAS PASSED AND OBAMA HAS ALREADY PROVED HE IS NOT THE AGENT OF CHANGE! READ MY LIPPS, AS I KISS BANKER ASS JUST LIKE GEORGE BUSH! NOW THAT IS “CHANGE YOU CAN BELIEVE IN” NO MR OBAMA THAT IS “JUST MORE OF THE SAME!’
OBAMA IS A FAKE AND HE HAS PROVED OVER AND OVER AGAIN! JUST 2 WEEKS IN AND HE HAS DONE NOTHING BUT THE SAME! “YES WE CAN!” YES WE CAN WHAT? WAYCH YOU KISS BANKER ASS! “YES WE ARE, WATCHING AND ITS SICK!” GET SOME BALLS ROOKIE!
Statement by the President Upon Signing the Excess Profits Tax Act
THE Excess Profits Tax Act of 1950, which I have signed today, is the second step the Congress has taken since the start of aggression in Korea to help meet the rapidly rising costs of national defense. The Congress and its committees have acted with commendable speed in completing this complex piece of legislation and thereby have provided evidence for all to see that we are determined to finance the defense program without jeopardy to the stability of our economic system or the soundness of the Government’s finances.
The 1950 tax legislation has increased Federal revenues very substantially. However, the task ahead of us will require more and much heavier taxes. I shall, in due course, submit to the Congress recommendations for substantial tax increases.
We shall have to canvass and recanvass every revenue possibility, including the new excess profits tax. In developing this tax in the few weeks at its disposal, the Congress may have been overly liberal in its concern over some corporations in special circumstances. Some of the provisions of this bill will probably give an undue advantage to some corporations, especially in relation to the tax burdens necessarily borne by others. Excessive exemptions and relief provisions create inequities and reduce the Government’s revenues needlessly.
– Harry S. Truman, January 3, 1951