News, France shows its leadership is competent compared to the US. (mortgage, free market)
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Hmm...so France actually gets it...that you can't cater to greedy executives and that you need to actually curb bonuses if they contributed to bank failures. What a concept. Sarkozy, Banks Set New Limits on Bonuses - WSJ.com
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Originally Posted by WallStreetJournal.com
France's leading banks agreed to penalize traders who lose money for their firms after getting a bonus and to limit other employee payouts as part of a French government effort to trigger a global clampdown on financial sector salaries.
This is fantastic. Especially the part about...
Quote:
Originally Posted by WallStreetJournal.com
To ensure banks stick to the new criteria, Mr. Sarkozy appointed a "pay czar," former French central banker and IMF Managing Director Michel Camdessus, who will monitor the bonuses of the 100 best-paid traders at each bank in France.
Now some might find this to be a bit...well..."socialist", perhaps, but I can't see any other way to curb an out-of-control situation like bank bonuses. The US needs to just bite the bullet and get this done - lock it down, get the banks to agree (contracts/etc be damned) and apply an oversight to keep it in check.
Also, for those who refuse to read the actual article, it's not saying they won't get bonuses at all. It's saying that they will only get bonuses when the bank is profitable and only then. Nobody can disagree that's a great thing...common sense. The other piece is that salary and bonus evaluation criteria and amounts must be publicized, so that the public can see who's getting what and the logic used behind those decisions.
As the president of france recently said we have a system that discouages work. They also declared thier healthcare system in crisis. Comnpetent leadership?
As the president of france recently said we have a system that discouages work. They also declared thier healthcare system in crisis. Comnpetent leadership?
I'm only referring to the banking industry, bank bailouts, huge bonuses, etc. I'm not referring to any other industry or its issues. Healthcare is a lose-lose scenario no matter how you slice it; nobody will ever be 100% satisfied with the way our healthcare system is. Either it's too expensive, too many people getting a free ride, not enough coverage, or not sufficiently useful.
But you were talking about the leadership. i would exactly say that they have done a very good job in france. Right now what is happening is that as firms lose people other gain those people.Talent at some levels isn't just hired off the street.
If businesses continue to give bonuses to those who lose them money they will go out of business soon. Which is what is needed. No need for czars of any sort. Just let the market work.
If local, responsible banks have better rates because they are more selective in their underwriting they will get the business and the "big" banks will continue to lose it.
This stuff isn't complicated.
What's really needed is a clamp down on the private business known as the Federal Reserve. That will fix a lot of the financial sectors problems.
But you were talking about the leadership. i would exactly say that they have done a very good job in france. Right now what is happening is that as firms lose people other gain those people.Talent at some levels isn't just hired off the street.
That's what I said. Their leadership is competent compared to ours. Meaning they're making the right decisions, the tough decisions.
I still believe a pay czar is necessary, because for some reason the US has gotten to the point that if bankers who were successful at some point in their career demand a certain amount of money and get it put into a contract, that they're entitled to that money. If the bank is going downhill and is in a crisis itself, they don't care. They don't care about the fact that taxpayers are footing the bill for something they really don't deserve at that time. Again, I'm all for adequate compensation when the bank has shown layers of success, but banks that failed/are failing? Million dollar windfalls? That has to come to an end. The stability of the bank has to be assessed at the time they are trying to pay bonuses and should be the #1 factor in determining who gets what money.
At the end of the day, people say "but then we'll lose that talent!" It's amazing how deluded the US population really is. They bow down to individuals and have been conditioned to believe that they can't operate without said individuals, when that could be farther from the truth. If they want to leave, let them. If they don't want to stay in the country without getting money they are not entitled to, let them leave. Stop letting the fat cats determine their own salary levels at our expense.
If the bank is going downhill and is in a crisis itself, they don't care. They don't care about the fact that taxpayers are footing the bill for something they really don't deserve at that time. Again, I'm all for adequate compensation when the bank has shown layers of success, but banks that failed/are failing? Million dollar windfalls? That has to come to an end.
That's a corporatist or socialist perspective.
I am more of a capitalist. I think that:
a) We should not regulate the pay of anyone in the private sector. Let shareholders do that.
b) We should not have prevented the failure of any private entities in the first place, so A) would not have been a taxpayer issue. We should've supported entire markets if need be, but not failed institutions.
I am more of a capitalist. I think that:
a) We should not regulate the pay of anyone in the private sector. Let shareholders do that.
b) We should not have prevented the failure of any private entities in the first place, so A) would not have been a taxpayer issue. We should've supported entire markets if need be, but not failed institutions.
B is an accurate point, but here's the problem. You say shareholders should regulate pay; what if they're not doing that because they're afraid based on what I stated before? You're ok with the fact that your local bank is in the red yet paying one of the executives that put them in that spot, millions of dollars of your money? That's okay with you? Because that's exactly what has been happening.
Remember, the whole mortgage situation came from the top. These same executives saw an opportunity, got greedy, and wanted to ramp profits for their own bottom line. They totally ignored every precaution at the expense of the depositors, and when it came back to bite, they still got paid; meanwhile there were depositors who lost their savings. You think that's fair? That depositors should lose their hard-earned profits to the pockets of someone who made all of the wrong decisions?
Trust me, in an ideal world the government would not intervene in the private sector at all. But if the private sector is corrupt and not willing to change for the good of all, I don't see that there is another option.
The "government" is more corrupt and incompetant that the private sector so that is a very poor long term solution.
Shareholders elect boards and boards set pay. Shareholders, especially large institutional investors, need to control this process - not some idiot government academic that has never worked a day in the real world in their life. I live in a free country (ostensibly) and I don't want a czar for anything.
Is executive pay obscenely high in the US - Yes. Are bonuses out of control - mostly YES. Is the free market system imperfect - yes. Is direct government control a better idea? How f'ing stupid can people be - it has never worked - ever - not once - anyplace - it is always a disaster - every bloody time.
I don't have a problem regulating markets in order to discourage behavior that is considered criminal - or to make sure that markets are level playing fields - or even to limit the amount of leveraging that can be used (as history has shown access to excess leveraging to consistently cause bubbles and huge market gyrations).
But direct government control of businesses? That's like curing an ant bite with a chainsaw.
B is an accurate point, but here's the problem. You say shareholders should regulate pay; what if they're not doing that because they're afraid based on what I stated before?
If the shareholders aren't regulating the pay of management, then the shareholders are pissing away their own capital.
"What you stated before", you need to be more specific, but I cannot see how it would change this fact that it is the bank's shareholders who are responsible.
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You're ok with the fact that your local bank is in the red yet paying one of the executives that put them in that spot, millions of dollars of your money? That's okay with you? Because that's exactly what has been happening.
OK, let's say my local bank is in the red, paying executives millions.
That isn't my problem, because it isn't my money, because I'm not a shareholder in my local bank.
In the event that the U.S. Government is a major shareholder, like in the case of Citi, then my position still stands that shareholders should regulate the pay of their executives.
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Remember, the whole mortgage situation came from the top. These same executives saw an opportunity, got greedy, and wanted to ramp profits for their own bottom line. They totally ignored every precaution at the expense of the depositors, and when it came back to bite, they still got paid; meanwhile there were depositors who lost their savings.
I am not aware of any depositors who've lost their savings. We have the FDIC for that purpose.
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Trust me, in an ideal world the government would not intervene in the private sector at all. But if the private sector is corrupt and not willing to change for the good of all, I don't see that there is another option.
I'm not going to trust you, because you seem to have your facts warped.
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