Bankers on the Brink: BBC interview

[GeezerMan]

23 minute BBC radio interview with MIT Sloan School of Business professor Simon Johnson. Have we just postponed a greater problem? Are the bankers laughing all the way to the bank? The greater their compenasation the greater the danger to society.


Link

 

[Craig234]

Thanks. Simon Johnson is one of my three favorite economics commentators (with Paul Krugman and Joseph Stiglitz). Listening now.

He's making some excellent points about the issues of the rise of big finance and their 'ideological takeover' of the US that's still in place and causing problems.

He's also mentioning that nothing has been done to fix the risk and it remains high for more crashes in coming years.

 

[Mani]

My girlfriend is taking a class of his...I'm jealous.

 

[StageLeft]

These bankers are like an alien from a movie wrapped around the host's spine sucking its spinal fluid, but it's too late to rip the creature off because it will kill the host, so you let it continue to devour fluid. That a company like goldman could qualify for bailout funds and then a short time later disburse vast billions in bonuses is a special kind of comedy. That those charged with controlling that bailout money and the federal reserve are also ex GS employees is also special comedy.

 

[ebaycj]

Realistically I could see a system where the government mandates increases in these companies' dividends as a "penalty" for having overly excessive/risk-rewarding benefit packages. This would at least give money back to the shareholders.

 

[IndyColtsFan]

Originally posted by: Skoorb
These bankers are like an alien from a movie wrapped around the host's spine sucking its spinal fluid, but it's too late to rip the creature off because it will kill the host, so you let it continue to devour fluid. That a company like goldman could qualify for bailout funds and then a short time later disburse vast billions in bonuses is a special kind of comedy. That those charged with controlling that bailout money and the federal reserve are also ex GS employees is also special comedy.

But...but...but..."talent" retention!!

 

[GeezerMan]

Originally posted by: blanghorst

Originally posted by: Skoorb
These bankers are like an alien from a movie wrapped around the host's spine sucking its spinal fluid, but it's too late to rip the creature off because it will kill the host, so you let it continue to devour fluid. That a company like goldman could qualify for bailout funds and then a short time later disburse vast billions in bonuses is a special kind of comedy. That those charged with controlling that bailout money and the federal reserve are also ex GS employees is also special comedy.

But...but...but..."talent" retention!!

Don't forget the bailout being a boon for the world too...

 

[IndyColtsFan]

Originally posted by: GeezerMan

Originally posted by: blanghorst

Originally posted by: Skoorb
These bankers are like an alien from a movie wrapped around the host's spine sucking its spinal fluid, but it's too late to rip the creature off because it will kill the host, so you let it continue to devour fluid. That a company like goldman could qualify for bailout funds and then a short time later disburse vast billions in bonuses is a special kind of comedy. That those charged with controlling that bailout money and the federal reserve are also ex GS employees is also special comedy.

But...but...but..."talent" retention!!

Don't forget the bailout being a boon for the world too...

I'm surprised the usual suspects haven't chimed in yet defending the bonuses.

 

[miketheidiot]

Originally posted by: blanghorst

Originally posted by: GeezerMan

Originally posted by: blanghorst

Originally posted by: Skoorb
These bankers are like an alien from a movie wrapped around the host's spine sucking its spinal fluid, but it's too late to rip the creature off because it will kill the host, so you let it continue to devour fluid. That a company like goldman could qualify for bailout funds and then a short time later disburse vast billions in bonuses is a special kind of comedy. That those charged with controlling that bailout money and the federal reserve are also ex GS employees is also special comedy.

But...but...but..."talent" retention!!

Don't forget the bailout being a boon for the world too...

I'm surprised the usual suspects haven't chimed in yet defending the bonuses.

i defend the bailout, not the bonuses. shareholders could use an expansion of rights.

 

[IndyColtsFan]

Originally posted by: miketheidiot

Originally posted by: blanghorst

Originally posted by: GeezerMan

Originally posted by: blanghorst

Originally posted by: Skoorb
These bankers are like an alien from a movie wrapped around the host's spine sucking its spinal fluid, but it's too late to rip the creature off because it will kill the host, so you let it continue to devour fluid. That a company like goldman could qualify for bailout funds and then a short time later disburse vast billions in bonuses is a special kind of comedy. That those charged with controlling that bailout money and the federal reserve are also ex GS employees is also special comedy.

But...but...but..."talent" retention!!

Don't forget the bailout being a boon for the world too...

I'm surprised the usual suspects haven't chimed in yet defending the bonuses.

i defend the bailout, not the bonuses. shareholders could use an expansion of rights.

Oh, are you identifying yourself as a "usual suspect"?

 

[brencat]

Govt should not be interfering in the compensation practices of private companies, period. Likewise, I was and still am dead against these and all bailouts on principle. Let the chips fall where they may. Despite the suffering which would ensue, there's nothing like a Depression that would rid this market faster of the hot money plaguing the equity and credit markets for the past 15 years, as well to teach the next 2 generations to live within their means (until the passage of enough time makes them forget again...).

 

[Craig234]

Originally posted by: brencat
Govt should not be interfering in the compensation practices of private companies, period. Likewise, I was and still am dead against these and all bailouts on principle. Let the chips fall where they may. Despite the suffering which would ensue, there's nothing like a Depression that would rid this market faster of the hot money plaguing the equity and credit markets for the past 15 years, as well to teach the next 2 generations to live within their means (until the passage of enough time makes them forget again...).

This strikes me as an ideological post - 'the government's proper role is not...'

I have no problem with having a preference to not have any intereference in wages, but I want a rational basis to be used, not ideology.

When we have systemic failure of our financial system, as we do in the sense that it's out of control and poses huge risk to society, you can't have all the ideological nicities.

*If* experts determined that the compensation was a central cause of the hue problems, and interfering would have great benefit - do it.

We're not talking Nixonian wage and price controls here, we're talking about the failure of our society's systems to prevent financial disaster, and some strong measures are ok.

An analogous issue which we might *prefer* government to stay out of but in this case I'm of the opinion they should interfere, is the 'too big to fail' issue. Break them up.

 

[brencat]

Originally posted by: Craig234
An analogous issue which we might *prefer* government to stay out of but in this case I'm of the opinion they should interfere, is the 'too big to fail' issue. Break them up.

It is my view that propping these zombie banks up has actually made the problem worse. So it's funny that you are against allowing companies to become 'to big to fail' when it is in fact the easy money policies of the Fed and the bailout culture in general that has allowed the biggest banks (JP Morgan, Goldman, BofA, etc) to consolidate the marketplace, retain their too big to fail moniker, and in fact become even bigger with concentrated risk.

Aside from that, broadly speaking once society has become accustomed to and is expecting the govt to intervene in this issue and that, there really are no limits as to what is the proper role for federal govt anymore, are there? That is the real danger, and why I have been taking the more Libertarian position lately.