Following on from yesterday’s story about Goldman Sachs as the root of all evil, today we get the information that:
Nine banks that received government aid money paid out bonuses of nearly $33 billion last year — including more than $1 million apiece to nearly 5,000 employees — despite huge losses that plunged the U.S. into economic turmoil. … The nine firms in the report had combined 2008 losses of nearly $100 billion.
And if you think things are going to change, don’t be deluded. Here’s what the Obama White House had to say:
"The president continues to believe that the American people don’t begrudge people making money for what they do as long as…we’re not basically incentivizing wild risk-taking that somebody else picks up the tab for," said White House Spokesman Robert Gibbs.
What happened to Obama’s feigned outrage last year before the election? It’s all gone, baby. It disappeared to the same place as his promises about Gitmo, prison camps, climate change and health care.
If the NBA has a salary cap, why can’t American corporations? One of the key problems with capitalism is the open-ended nature of the upside. It breeds unlimited greed. Surely we can combine the good aspects of capitalism – eg incentives for creativity and effort – but restrict the upsides? I know we have tiered taxation, which effectively acts as a way of channeling some of that upside back into the system, but it doesn’t stop companies and individuals trying to bleed the economy for as much money as they can get their hands on, despite the negative consequences.
It still seems to me that we need another system, one that limits the greed but retains the incentives.