If the bailout were properly structured, firms would not be lining up to get in. It should be a last resort that involves selling most of the firm to the government, as happened with AIG. If banks are lining up to get in, then the people who designed the bailout should be chased out of town.
-- Dean Baker
Update: A series of quotes on a particular angle of the Golden Fleece:
In 2007, Wall Street's five biggest firms-- Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley - paid a record $39 billion in bonuses to themselves. That's $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns. Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines --their worst year since 2002. If split equally among the approximately 186,000 workers at the former Big Five Houses, that bonus money means an average of $201,500 per person -- more than four times the $48,201 median household income in the U.S. last year.
-- ABC News
Bush Backs Unlimited Compensation For Disgraced CEOs
-- Think Progress Headline
Having punitive measures would provide a disincentive for firms to participate, and that would make the program much less likely to succeed.
-- George W. Bush
By law, managers are fiduciaries for shareholders. Any manager of a financial institution who refused to sell assets to the Garbage Pail Agency because doing so would cap his salary would be personally liable for any resulting losses.
-- Mark Kleinman
If the bailout were properly structured, firms would not be lining up to get in. It should be a last resort that involves selling most of the firm to the government, as happened with AIG. If banks are lining up to get in, then the people who designed the bailout should be chased out of town.
-- Op. Cit.
Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5 billion... the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy...
-- UK Independent
...punitive measures are essential. The normal punishment for failed business leadership is that your company goes bankrupt. But the crux of the current situation is that everyone agrees that it would be unwise to simply let these financial firms fail. The spillover damage to the rest of the economy would be too great. So one way or another, they need to be saved. But rescuing companies in these kind of situations creates a “moral hazard” problem. You want to prevent the firms from folding, without creating an incentive for future executives to engage in irresponsible behavior.
-- Matt Yglesias
This isn’t a natural disaster like the Gustav hurricane. This is a man-made, avoidable, preventable problem — and a lack of oversight and accountability was one of the problems.
-- Chris Dodd
...must be held to account. There must be a consequence... We're making good progress in terms of the implementation of our accountability systems... embracing a new level of accountability... a culture of achievement, a culture of results over process. In this new culture, accountability plans are driving reform.
-- George W. Bush, 2003, talking about something effecting poor rather than rich people
"Do we really want to signal that risks are public and rewards are private?" I think it depends who "we" are. James and I and most ordinary people make up a "we" who don’t want to signal any such thing. The people actually making policy are a whole other "we." I suspect they do want to signal "that risks are public and rewards are private" if you are rich and influential.
-- Jim Henley
Conservatism is the domination of society by an aristocracy... People who believe that the aristocracy rightfully dominates society because of its intrinsic superiority are conservatives; democrats, by contrast, believe that they are of equal social worth. Conservatism is the antithesis of democracy.... Conservatism in every place and time is founded on deception. The deceptions of conservatism today are especially sophisticated, simply because culture today is sufficiently democratic that the myths of earlier times will no longer suffice.
-- Philip Agre, "What is Conservatism and What is Wrong With It?" (2004)
Then I'll get on my knees and pray
We don't get fooled again
-- The Who
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